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AUSTRALIA'S FOREIGN INVESTMENT POLICY
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In the forward to the
publication "Australia's Foreign Investment Policy" the then Treasurer, John Dawkins, said
"the Australian Government
welcomes foreign investment. The government recognises the substantial
contribution foreign investment has made and can continue to make to the
development of Australia's industries and resources".
Residential Properties that currently have Foreign
Investment Approval
The Pinnacle
Surfers Paradise
Marquis on Main
The Foreign Investment Review Board is an advisory
body set up under the Foreign Acquisitions and Takeover Act 1975. Its main
functions are:
§ to examine proposals by foreign interests in
Australia and to make recommendations to the Government on those
proposals
§ to advise the Government generally on foreign
investment matters
§ to provide guidance if necessary to foreign
investors on those aspects of their proposals not in conformity with
Government policy and to suggest ways by which the proposals may be
amended.
Foreign interests proposing to acquire real estate
should be individually submitted for examination and approval unless they
fall into certain exempt categories. The two most common types of real
estate acquired by foreign investors are:
1. Residential
2.
Commercial
1. RESIDENTIAL REAL ESTATE
1.1 What is
Residential Real Estate?
Residential real estate means all
Australian real property other than (i) commercial properties (ie offices,
factories, warehouses, hotels, restaurants, shops, recreation facilities
etc.) and (ii) land which is integral to a farming business. Acquisitions
of "hobby farms" and "rural residential" blocks by foreign interests are
also examined under the policy applying to residential real
estate.
1.2 Who Should Apply?
All proposed acquisitions of
residential real estate should be submitted for examination regardless of
value unless the purchaser is an Australian citizen, permanent resident,
approved migrant or a foreign national having an entitlement to take up or
retain permanent residence in Australia (such as a New Zealand citizen).
Other foreign persons wishing to purchase residential real estate
(including temporary residents and the foreign spouses of Australian
citizens and permanent residents) must apply in advance to the Government
through the Foreign Investment Review board for approval.
1.3
Developed Residential Real Estate
Developed residential real estate
means existing houses, flats or units. Acquisitions of developed
residential real estate by foreign interests are not normally approved
except (i) in the case of foreign companies buying for their senior
executives resident in Australia for periods longer than 12 months, and
(ii) foreign nationals temporarily resident in Australia for more than 12
months purchasing a residence for use as their principal place of
residence while in Australia (and not for rental purposes), subject to the
sale of the property when they cease to reside in Australia. This latter
category includes long-stay retirees, and students 18 years of age and
over studying courses of more than twelve months duration at recognised
tertiary institutions.
1.4 Residential Real Estate for
Development
Acquisitions of residential real estate (including
vacant building allotments) for development by foreign interests are
normally approved subject to a specific condition requiring construction
to commence within 12 months. Applications to acquire existing residences
for redevelopment may be approved under this category provided that the
proposal provides for substantial redevelopment expenditure in relation to
the acquisition cost of the property and/or an increase in the housing
stock. Once the development condition has been fulfilled, there is no
restriction on the subsequent use of the property by the foreign investor,
ie. it may be rented out, sold or retained for the foreign investor's own
use.
1.5 "Off-the-plan" Purchases
Foreign interests may
apply to acquire home units, town houses, house/land packages etc. in a
new development, either "off-the-plan", during the construction phase or
when the dwelling is newly completed, provided that it has never been
occupied or sold and provided no more than 50 per cent of the dwellings in
any one development are sold to foreign interests. This category includes
acquisitions that are part of extensively refurbished buildings where the
building's use has undergone a change from non-residential (eg. office,
warehouse, hotel, motel) to residential and the cost of refurbishment is
at least 50 per cent of the total acquisition cost based on purchase price
or market value of the property, whichever is the greater. Developers of
such properties may apply in advance to sell up to 50 per cent of
residences to foreign investors. where such approval has been granted, it
is not necessary for individual investors to apply. A property purchased
under this category is not subject to any restriction on its subsequent
use, ie it may be rented out, sold or retained for the foreign investor's
own use. However, when the property is sold it is treated as developed
residential estate and its sale is subject to the restrictions applying to
that category of residential real estate.
1.6 Integrated Tourism
Resorts
Acquisitions of residential real estate within a resort
which has been designated by the Government as an Integrated Tourism
Resort do not require foreign investment approval. However, the operators
of the resort are required to report annually to the board providing
details of the ownership of all accommodation within the
resort.
1.7 Australian Citizens and Foreign
Spouses
Applications by Australian citizens and their foreign
spouses to purchase residential property in their joint names are normally
approved without conditions.
2. COMMERCIAL REAL
ESTATE
2.1 What is Commercial Real Estate?
Commercial real
estate means all Australian real property other than (i) residential
properties (ie. houses, flats, units, vacant land zoned for residential
development, "hobby farms" and "rural residential" blocks) and (ii) land
which is integral to a farming business.
2.2 Who Should
Apply?
Acquisitions of commercial real estate by foreign interests
should be submitted to the Government through the foreign Investment
Review board for approval prior to purchase unless the acquisition is
exempt (see below). Foreign interests are natural persons, other than
Australian citizens and permanent residents who have been resident in
Australia for at least 200 days out of the last year, and corporations,
businesses or trusts in which there is a substantial foreign interest. A
substantial foreign interest is a holding of 15 per cent or more by a
single non-resident person or corporation (either alone or with
associates) or an aggregate holding of 40 per cent or more by a number of
non-residents taken together.
2.3 Exempt Commercial Real Estate
Acquisitions
Acquisitions of commercial real estate by Australian
citizens resident abroad or companies or trusts owned by Australian
citizens resident abroad do not require approval. Acquisitions of
commercial real estate where the total value of the property being
acquired is less than $5 million do not require notification or approval
unless (i) the ownership of the property is vested in a holding company
which is being acquired or (ii) the property is being acquired by the
agent of a foreign government. Acquisitions of commercial real estate
which are to be used immediately for industrial or commercial purposes
which are incidental to an existing or proposed business (other than a
business or dealing in land or operating hotels motels or tourist
facilities) do not require notification or approval. (further details of
exempt acquisitions are available from the booklet "Australia's Foreign
Investment Policy: A Guide for Investors".)
2.4 Developed
Commercial Real Estate
Acquisitions of developed commercial real
estate valued over $5 million are normally approved (unless considered
contrary to the national interest) subject to the acquisition being made
with 50 per cent Australian equity. However, approval may be given for
acquisitions with up to 100 per cent foreign equity where the parties can
show that the property was actively marketed for a period of three months
prior to their purchase or was sold by public auction or open
tender.
2.5 Commercial Real Estate for
Development
Acquisitions of commercial real estate valued over $5
million for development or substantial redevelopment are normally approved
(unless considered contrary to the national interest) subject to a
condition that construction commence within a specified period of time
(normally 12 months).
2.6 Applications
The Board is unable to give
"in principle" approval to persons wishing to acquire property, so an
application for foreign investment approval must specify the particular
property to be acquired.
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