The Australian Government has announced a reintroduction of tough measures with regards to the rules for foreign investment in Australian residential real estate, only a year after relaxing requirements.
The new rules bring into place tough new civil penalty, compliance, monitoring and enforcement measures on the back of foreign purchasers and real estate agents that have allegedly flaunted the laws.
The measures mean that foreign non-residents can only invest in Australian real estate if that investment adds to the housing stock, and that investments by temporary residents in established properties are only for their use whilst they live in Australia.
All temporary residents seeking to purchase an existing property in Australia will now be brought within the Foreign Investment Review Board (FIRB) notification, screening and approval process.
These changes ensure that temporary residents are subject to the same process required of foreign non-residents.
Furthermore, approved temporary residents will now be required to:
- sell the established property they have bought when they depart Australia; and
- be required, where undeveloped land has been purchased, to commence construction on that land within 24 months or have the land forcibly sold.
The Government stated, “International investment that boosts the numbers of houses available for people to rent is a good thing and temporary residents living here should, within very strict rules, have the opportunity to buy a home – that’s how it’s always been under Governments of both persuasions”.
Australia’s foreign investment regulations rely on a combination of legislation, primarily the Foreign Acquisitions and Takeovers Act 1975 (FATA), its related regulations, the Foreign Acquisitions and Takeovers Regulations 1989 (FATR) and an accompanying Government Policy (Policy). These are administered by the Foreign Investment Review Board (FIRB).
MORE:
- Visit the FIRB website here
- Read the full statement by Senator Nick Sherry here
- Members of the public can report information on possible breaches of Australia’s foreign investment policy on 1800 050 377
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