Understanding the Foreign Investment Review Board (FIRB) and Its Role in Property Transactions

The Foreign Investment Review Board (FIRB) is an Australian government body tasked with overseeing and regulating foreign investment in Australian property and other assets. This article outlines the functions of FIRB, who needs approval, and the application process for foreign investors and temporary residents looking to purchase property in Australia.

What is the Foreign Investment Review Board (FIRB)?

The FIRB is responsible for reviewing and assessing applications from foreigners who wish to invest in or purchase property in Australia. This oversight ensures that foreign investments align with Australia's national interest and adhere to the legal requirements established under the Foreign Acquisitions and Takeovers Act 1975.

Who Needs FIRB Approval?

1. Temporary Residents

If you are on a temporary visa—such as a spouse visa, a 457 work visa, a Temporary Skill Shortage (TSS) visa, or a student visa—you will need FIRB approval to buy property. Here are the specifics:

• Established Dwellings: You can purchase only one established dwelling, and it must be used as your primary residence. You are required to sell it when you no longer reside in it.
• Investment Properties: You are permitted to buy new properties or vacant land with the intention of constructing a new property.
• Joint Purchases with an Australian Citizen Spouse: If you are buying property with an Australian citizen spouse as joint tenants, FIRB approval is not required. However, if purchasing as tenants in common, FIRB approval is necessary.

2. Foreign Investors

Foreign investors must obtain FIRB approval for property acquisitions. The conditions are as follows:

• New Properties or Vacant Land: Foreign investors can purchase new properties or vacant land, provided they plan to build a new property.
• Established Dwellings: Foreign investors are not permitted to buy established dwellings as investment properties.
• Renting to a Child on a Temporary Visa: It is permissible to buy a new property and rent it to a child who is on a temporary visa.

Exceptions for Foreign Citizens:

• Property Developer Exemptions: If a property developer has obtained an exemption certificate for the new property you wish to buy, FIRB approval may not be required.
• Court Orders or Divorce Settlements: If you are awarded property through a court order or divorce settlement, FIRB approval is not needed.

Who Doesn’t Need FIRB Approval?

1. Australian Citizens

Australian citizens, whether residing in Australia or overseas, do not need FIRB approval to purchase any property—new, existing, or vacant land. They can use the property as a primary residence or as an investment.

2. Australian Permanent Residents

Permanent residents of Australia are exempt from FIRB approval for purchasing new, existing, or vacant land properties. They can also choose to live in or rent out the property.

3. New Zealand Citizens

New Zealand citizens are similarly exempt from FIRB approval requirements. They can buy new, existing, or vacant land properties and are not required to be in Australia at the time of contract exchange, although they may face a foreigner stamp duty surcharge in some states.

4. Temporary Residents Buying with an Australian Citizen Spouse

If a temporary resident is buying property with an Australian citizen spouse as joint tenants, FIRB approval is not required. However, if the purchase is made as tenants in common, FIRB approval is necessary. In such cases, the property can be a new, existing, or vacant land.

FIRB Application Fees

As of mid-2015, FIRB charges application fees for foreign investors. The fees vary based on the value and type of the property:

• Less than $75,000: New or near-new property or vacant land: $4,300; Established property: $12,900
• $75,000 - $1,000,000: New or near-new property or vacant land: $14,700; Established property: $44,100
• $1,000,001 - $2,000,000: New or near-new property or vacant land: $29,500; Established property: $88,500
• $2,000,001 - $3,000,000: New or near-new property or vacant land: $59,000; Established property: $177,000
• $3,000,001 - $4,000,000: New or near-new property or vacant land: $118,000; Established property: $265,500
• $4,000,001 - $5,000,000: New or near-new property or vacant land: $112,800; Established property: $354,000
• Above $5,000,000: Fees vary; refer to FIRB for detailed information

How to Lodge a FIRB Application

Applications can be submitted via the Australian Tax Office’s Residential Real Estate Application Form. Required documents include personal identification (passport and Australian visa, if applicable), contact details, and property information. The application should be submitted after selecting a specific property, as pre-approval is not available.

Types of Properties You Can Buy

• Investment Properties: Typically, foreign investors are allowed to purchase new properties or vacant land for development. Established dwellings are generally restricted.
• Home (Owner-Occupied): If a temporary resident buys an established dwelling for personal use, they must sell it when they leave Australia.
• Vacant Land: Foreign investors can buy vacant land if they commit to starting construction within 24 months.

Final Considerations

Owning property in Australia as a foreign investor or temporary resident involves navigating FIRB regulations and ensuring compliance with local laws. For accurate and up-to-date information, it is advisable to consult the FIRB guidelines and seek professional advice if necessary.

For further details, visit the FIRB website or contact a migration agent to understand how property ownership might impact your visa or residency status.

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