If you are looking to invest in property in Australia, there’s a good chance you would have come across the FIRB – or the Foreign Investment Review Board. The FIRB is a government department that assesses applications from overseas investors who are looking to purchase property on Australian soil. This includes anyone who is not an Australian citizen, who doesn’t have permanent residency or who is not an approved migrant.
Basically, the FIRB is in place to ensure that any property bought by a foreign investor will in some way benefit the Australian economy. Foreign investors are usually limited to buying new property, this way the government can control the housing stock in Australia.
Let’s take a look at some of the finer details and common queries about getting FIRB approval and buying property in Australia if you are a foreign investor.
Who Needs FIRB Approval?
If you are either a temporary resident or a foreign investor looking to purchase property in Australia then you will need to submit an application to the Foreign Investment Review Board.
If you are a temporary resident on a temporary visa, including a spouse visa, a 457 visa or a student visa, then you will need to get approval from the FIRB before investing in property in Australia.
However, you don’t need FIRB approval if you are purchasing property as a joint tenant with an Australian citizen that is your spouse. This doesn’t apply to joint investments with say, a business partner, family member or friend.
Temporary residents are restricted to only buying new property – or vacant land to build a new property on – as investments.
As with temporary residents, foreign investors must also apply for approval from the FIRB. The property must also be new or vacant land to build new property on.
Although it is difficult for foreign investors to receive approval from the FIRB without a valid visa, you can buy property in your name, and rent it out to a child who has is a temporary resident.
Are Any Foreign Investors Exempt from FIRB Approval?
You may be exempt from getting approval from FIRB approval if:
• The property was inherited
• The property was awarded to you by court order or through a divorce
• The developer of the property you are buying has obtained a special exemption certificate
Buying an Investment Property vs Buying a Property To Live In
When it comes to FIRB approval, there is a difference between purchasing a property as an investment and purchasing a property for you to live in. Generally, applications for investment properties are accepted more often than those that are for living.
How Much Does FIRB Approval Cost?
The Foreign Investment Review Board charge a fee for any foreign investor looking to purchase property in Australia, with the exception of those who are purchasing a property with an Australian citizen or permanent resident.
Fees vary, ranging from anywhere between $5,000 and $10,000 for properties up to a value of $2 million. Fees scale up beyond these price points, but the majority of properties will fall within this price range.
You can have a look at more in-depth information about fees on the FIRB website.
How Do I Lodge My FIRB Application?
The FIRB application process can be done online via the Australian government website.
Foreign investors will be directed to the Australian Tax Office’s Residential Real Estate Application Form. Usually the FIRB will take around 30 days to review and approve a standard application. Applications submitted with incorrect information will need to resubmitted, which may result in processing delays and additional charges, so be very careful when filling out your application!
When Is The Right Time to Apply for FIRB Approval?
Unfortunately you can’t apply for any sort of FIRB ‘pre-approval’. It is actually quite a timely process as you can only apply for approval once you have selected the investment property you want to buy.
Tip: When negotiating the terms of sale for your property, be sure to include a clause that allows you to withdraw from the sale in the event that your FIRB approval does not go through. This is only a precaution! Don’t stress – if you follow the FIRB application rules then it is very likely that your investment will be approved.
What Do I Do If My FIRB Approval IS Granted But I Change My Mind?
On the other hand, if you receive your FIRB approval, but then decide you don’t want to purchase the property anymore, you will need to get in touch with the FIRB immediately and notify them of the change.
Optimal is dedicated to being with you every step of the way; from the day you start researching a property to the final successful sale, we’ll be there, an integral part of your investment team.