Foreigners buying property in Australia need to receive foreign investment approval before they can buy property. Whether they will receive this approval depends on the exact legal status of the foreigner and the type of property they are looking to buy.
Foreign Non-Residents Buying Property
Any non-resident of Australia (including people on limited period visas) cannot buy property for sale without approval from the Foreign Investment Review Board. An individual with a visa for more than 12 months will be permitted to buy one established dwelling as their residence. This property must be sold within three months of departure from Australia. For all other purchases the standard restrictions apply.
Foreigners who are permanent residents or who hold a permanent visa can freely purchase property as if they were an Australian citizen.
Australian citizens, even if they no longer reside in Australia, can purchase property without restriction.
Corporations, Partnerships, and Trusts may meet the legal definition of a foreigner if a substantial interest (20-40%) in the entity belongs to foreigners. For example, if a business is owned by two people each with a 50% interest and one of them is a foreigner, then the company must receive foreign investment approval.
Restrictions for Foreigners Buying Property
Different restrictions apply to foreigners buying property depending on the type of property.
Foreigners will generally be approved for the purchase of a new dwelling without any issues. There is no limit on the number of new dwellings that can be purchased. However, approval is required from the Foreign Investment Review Board prior to each purchase.
A new dwelling is a dwelling that has been (or will be) built on residential land, has not previously been sold as a dwelling, and has not previously been occupied. Refurbished and renovated properties do not count as new dwellings. A single dwelling that been built to replace a demolished dwelling generally will not constitute a new dwelling either.
Foreigners buying property can purchase vacant land for the purpose of residential property development. However, the development must be completed within four years from the date of approval and evidence provided.
Foreigners cannot purchase an existing dwelling for use as a holiday home or an investment property. They can purchase an established dwelling if it is for the purpose of a residential property development that will increase the amount of housing stock available.
Fines for Non-Compliance
If a foreigner purchases a property without approval from the Foreign Investment Review Board they will be required to dispose of their interest in the property. They may be subject to fines up to AU$55,000 or two years imprisonment. If they are in breach of a contract they may lose their deposit and be liable for damages.
While all reasonable care has been taken in the preparation of this article, we accept no liability for any direct or indirect loss or damage as a result of reliance upon this article. Always consult an expert before making investment decisions or property purchasing decisions.