With the Australian property market’s escalating value and its rising appeal on the global stage, it is becoming crucial for prospective investors to understand the regulatory landscape surrounding foreign property investment. Specifically, it is imperative for foreign investors to grasp the significance of the Foreign Investment Review Board (FIRB) and comprehend the regulations that dictate their ability to acquire property in Australia.

What is FIRB?

The Foreign Investment Review Board (FIRB) assesses applications from non-residents of Australia prior to purchasing residential property in Australia. During this assessment, the FIRB considers various criteria and stipulates certain conditions that must be met before granting approval.

Who needs FIRB approval?

Foreign investors and temporary residents who are holders of temporary visas will need FIRB approval prior to purchasing a residential property.

If you fall within the following categories, your purchase is exempt from FIRB approval:

  • You are an Australian or New Zealand citizen
  • You are an Australian permanent resident who is a holder of an Australian permanent visa
  • You are purchasing property with a spouse (as joint tenants) who is an Australian or New Zealand citizen or Australian permanent resident
  • You are purchasing a new dwelling from a developer who holds a new dwelling exemption certificate
  • You acquired the property by a Will or a Court Order

*The above list is updated periodically; it is not comprehensive. If you believe you might qualify for an exemption, we encourage you to contact our team at Farrar Gesini Dunn for further information.

Property Types

FIRB considerations are based on the types of property:

Established dwellings

An established dwelling is an existing home that has been occupied by people before and not a newly built home.

The following conditions apply if you are seeking FIRB approval to purchase an established dwelling:

  • You use the property as your principal place of residence
  • You must not rent out the property or any part of it
  • The property is vacant at settlement
  • If the property ceases to be your principal place of residence or you are no longer a temporary resident, you must dispose of the property within 6 months

There are further conditions that may apply if you purchase an established dwelling for redevelopment purposes, for example: demolish and rebuild one or multiple new dwellings.

New dwellings

A new residential dwelling is a dwelling that:

  • Will be, is being, or has been, built on residential land
  • Has not been previously sold as a dwelling
  • Has not been previously occupied or was not occupied for more than 12 months if it was sold in a development

An application to buy a new dwelling will be typically approved, provided that you do not buy a new dwelling that has been constructed to replace one or more demolished dwellings.

Vacant land

Vacant land is land that has no substantive permanent building on it to be lawfully occupied by persons, goods or livestock.

The following conditions apply if you are seeking FIRB approval to purchase a vacant land:

  • At least one residential dwelling is built on the land
  • You do not sell, transfer or dispose of your interest in the land before construction is complete
  • Construction is completed within 4 years from the date of FIRB approval
  • You submit evidence of completion of construction within 30 days of receiving it (e.g. certificate of occupancy and use or builder’s completion certificate)

Exemption Certificate

You can obtain an exemption certificate if you are looking to make multiple attempts to purchase one property. For example, the exemption certificate allows you to make a bid on a property at auction without having to seek individual FIRB approval for each property you attempt to purchase.

The exemption certificate will:

  • Be valid for 12 months from the date of approval
  • Specify a limit on the property value, the state or territory of the property and the types of property that you may purchase

If you require any changes to the exemption certificate, such as the value or type of property, you will need to submit a new FIRB application. If you are uncertain about whether an exemption certificate is suitable to you, we invite you to contact our team at Farrar Gesini Dunn to find out more.

Timeframe and Fees

You can make an application for a FIRB approval or an exemption certificate online through the government department website using their Online Services. You must pay the application fee in full in order for your application to be processed. The amount of the fee payable will depend on the value of the property. For example, the higher the value of the property, the higher the application fee. You may refer to the government department website for a schedule of fees.

The turnaround time for an approval is presently approximately 30 days.

It is imperative that the contract for sale you enter into is conditional upon receipt of FIRB approval to avoid contracts falling over due to approval not being able to be obtained. This is often overlooked and can lead to disappointment.

Stamp Duty Surcharge

In most Australian states and territories, a foreign stamp duty surcharge will apply to foreign investors and temporary residents who purchase residential property in Australia.

You should seek our advice on stamp duty applicable to your purchase and any foreign surcharges that may apply to your specific circumstances.

Selling a Residential Property as a Foreign Resident

If you are a foreign resident selling an Australian property worth more than $750,000, the buyer of your property must withhold 12.5% of the purchase price to be payable to the ATO on settlement. This is referred to foreign resident capital gains withholding and you may claim it back when you lodge your Australian tax return.

Your solicitor or conveyancer can assist you with the withholding process as part of the conveyance.

Key Takeaways

If you are a foreign investor or a temporary resident considering acquiring property in Australia, we encourage you to consult with our experienced property lawyers. They are well-equipped to offer guidance on your responsibilities under the Foreign Investment Review Board (FIRB) regulations, assist with obtaining FIRB approval, and ensure your contracts aligns with FIRB requirements.

For inquiries related to tax implications, particularly how your residency status influences Capital Gains Tax (CGT), it is advisable to seek advice from a financial advisor. Alternatively, our proficient accounting team is at your disposal to discuss tax compliance and address any tax-related concerns you may have.

Tiffany Monorom, Property Lawyer FGD

Tiffany Monorom

Property Lawyer

Tiffany joined us as a Property Lawyer after having been practicing exclusively in property and commercial law since her admission as a Legal Practitioner in the ACT Supreme Court.

Tiffany’s focus is to deliver excellent legal service and client experience, in particular, helping first home buyers navigate the complexities of purchasing their first home.

Read More about Tiffany >

Siobhan Garvey, Conveyancing Clerk FGD

Siobhan Garvey


Siobhan takes pride in providing high-quality service to every one of her clients. Whether it’s buying a first home, or selling an investment property, her main objective is to provide her clients with a conveyancing service that is easy to understand, while still obtaining the desired result.

Her clients appreciate her positive nature and straight-forward approach, knowing they are in safe hands.

Read More about Siobhan >

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