CONDITIONS FOR FOREIGNERS TO OWN AUSTRALIAN REAL ESTATE PERMANENTLY

Australian real estate investment is becoming a trend among global investors, this is considered a safe way to accumulate assets. Possessing a stable economy, vibrant market, and transparent legality, contributes to helping Australia become one of the countries classified as a safe investment portfolio for investors. 

For foreign investors, the Australian real estate market is extremely attractive, promising to bring outstanding growth and opportunities. 

However, before participating in this investment field, you need to clearly understand the processes and conditions for investing and owning Australian real estate to have comprehensive knowledge and avoid unnecessary risks. 

1. Benefits from investing in Australian real estate

1.1 Rental potential

Major cities such as Sydney, Melbourne and Brisbane, consistently show consistently rising rental yields. The main reason comes from many factors, including the increasing number of population, international students, abundant labor market,… contributing to creating high demand for this market.  

1.2 Capital growth

In the past, Australian real estate has shown incredible resilience and growth. Investors can benefit from long-term growth, especially in hot spot areas. A stable economy and enhanced government policies have pushed the real estate market into a promising path.

1.3 Diverse investment opportunities

From vibrant urban centers to peaceful coastal towns, Australia offers a diverse range of investment opportunities. A variety of real estate types meet the taste of each investor.

2. Can foreigners buy and own Australian real estate?

Foreign residents, temporary residents or short-term visa holders are allowed to buy real estate for investment or residential purposes, provided they are licensed by the Australian Foreign Investment Review and Control Board (FIRB). 

FIRB reviews foreign investment proposals on a case-by-case basis. In addition to licensing, there are strict regulations regarding residential and investment properties. 

Because, the Foreign Investment Review and Control Council is responsible for investors participating in new housing instead of old housing. This will contribute to economic development – related to national interests, ensuring revenue from stamp duty as well as preventing loss of control and rights of Australians. 

Below is a detailed instruction process that newbies need to understand: Australian real estate buying process

3. Types of Australian real estate that foreigners can own

3.1 New house 

FIRB defines “new housing” as property that has not previously been sold as a home and previously owned by anyone. 

3.2 Vacant land

FIRB approves the purchase of vacant land for properties under construction within four years of the date of approval. Once construction is completed, evidence must be submitted to FIRB within 30 days.

3.3 Other exceptions

Exceptions allow foreigners to buy second-hand real estate. 

3.2.1 Buy existing houses for redevelopment

Foreign investors can buy an existing home, provided they have plans to redevelop and increase housing supply. In other words, they will have to demolish the existing property, replace or renovate one or more new properties into that area.

There are strict time constraints on redevelopment, which must be completed within four years of FIRB approval and evidence must be submitted within 30 days of construction completion.

3.2.2 Temporary residents

The second exception applies to temporary residents purchasing real estate in Australia. Temporary residents can apply to buy a house for residence, provided they sell the house when they leave the country. However, if the temporary resident becomes a citizen or permanent resident, they will not have to sell their home.

3.2.3 Commercial real estate

And finally, FIRB often approves commercial investments, because this is a safe and low-risk category. However, the approval requirement still applies.

4. Registration process with the Foreign Investment Review and Control Board (FIRB) 

FIRB has separate regulations for foreign investors, the registration process is quite simple. First, apply on the Australian Taxation Office (ATO) website using the available application form. This is an online application, please fill in all details and submit via the ATO website.

When submitting your application, you will have to pay a registration fee (this fee depends entirely on the value of the property you want to buy and changes every year). You need to follow the FIRB website.

Typically, within 30 days you will know whether your application has been approved or denied.

5. Waiver of FIRB approval when purchasing a home

FIRB applications are usually only required for non-residents or temporary residents who want to buy property in Australia. Therefore, the following entities are exempted from applying for approval with FIRB:

• Australian citizen (regardless of whether living in Australia or not).
• New Zealand citizen.
• Australian permanent resident visa holders.
• Foreigners buy joint property and marry someone who belongs to one of the above categories.

6. Important things to understand

The Australian government has strict regulations on buying and selling each type of real estate, so investors need to follow the rules and understand the regulations before starting in this market.

Foreign investors can buy residential property in Australia, but must have approval from the Australian Foreign Investment Review Board (FIRB) and are only allowed to invest in new homes or vacant land. 

Finding a reputable agent to advise and support real estate buying and selling procedures is extremely important. With many years of experience and a team of consultants with degrees and certificates, My Australian Property is one of the trustworthy units.

To discuss any matters relating to property sales and Australian market information, contact My Australian Property today. You can access & follow at Fanpage My Australian Property or on other My Australian Property social media platforms such as Tik Tok.

Source: property tax specialists

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