The Non-Resident Buying Property in Australia Guide

The Non-Resident Buying Property in Australia Guide

Buying property in Australia is an exciting decision that can be very rewarding. The country has a thriving economy, beautiful landscapes to explore, and excellent capital growth. 

However, the process of buying property in Australia for non-residents is not always straightforward. 

Therefore you should make sure you are well prepared before you take the plunge.

The Foreign Investment Review Board (FIRB) sets out strict rules for non-residents (foreign persons) buying residential property in Australia. 

So, the following guide will provide a starting point of the information you need as a non-resident looking to buy property in Australia, including how to apply to the FIRB. 


Foreign Investment Review Board: Can Non-Residents Buy Property in Australia?

Yes, foreign residents, temporary residents, and short-term visa holders are allowed to buy investment properties and residential real estate in Australia, provided that they’re granted permission to do so by the Foreign Investment Review Board. 

Beyond applying for permission, there are strict rules regarding the type of residential real estate and investment property you can buy. This is because the Foreign Investment Review Board (FIRB) is responsible for ensuring that most foreign property investment is targeted at new dwellings instead of established dwellings.  

The idea is that if non-residents invest in building new properties, then job creation will follow in the construction industry, and the economy will grow. Beyond that, the government can gain revenue through stamp duty taxes while ensuring that Australian residents aren’t deprived of property they can purchase and live in. 


Foreign Investment: What Types of Dwellings Can You Purchase?

The rationale for allowing foreign buyers to purchase Australian property is formed on the basis that they can’t buy an established dwelling. 

That means that foreign investors can purchase: 

  • New buildings: which the FIRB defines as property that has not been previously sold as a dwelling and has not been previously occupied. If the developer sold the investment property, it must not have been occupied for more than 12 months. 
  • Vacant land: which the FIRB approves subject to a property being constructed within four years of the approval date. Once construction has been completed, proof must be sent to the FIRB within 30 days.


Are There Exceptions to the Established Dwelling Rule? 

Although foreign investors are generally not allowed to purchase established properties, there are three exceptions to this rule. 

Foreign investors can buy an established dwelling provided that they plan to redevelop the property and increase the housing stock. In other words, they’re going to knock the existing property down, replace it and add an additional dwelling or more onto the land. 

So, redevelopment is subject to the condition that more than one additional property has to be built. 

There are also time constraints on the redevelopment. The demolition, redevelopment, and construction of the new property must be completed within four years of FIRB approval, and proof must be sent to them within 30 days of the construction being completed. 

The second exception applies to a temporary resident buying Australian property. Temporary residents can apply to purchase residential property to reside in, provided that they sell the home once they leave the country. However, if the temporary resident becomes a citizen or permanent resident, they will not have to sell the dwelling. 

And lastly, the established dwelling rule doesn’t apply to commercial property. The FIRB typically approves commercial investments with less hassle than residential. However, the requirement for approval still applies.


How Does the FIRB Application Process Work?

Once you’ve familiarised yourself with the FIRB rules around purchasing property as a foreign investor, the application process is fairly straightforward. You’ll find the application form on the Australian Tax Office (ATO) website. It’s an online application – so you’ll fill in your details and submit it via the ATO website. 

Along with the application form, you’ll have to pay an application fee. 

The fee is entirely dependent on the cost of the new property or vacant land you want to buy and changes each year. So you will need to keep an eye on the FIRB’s website

You’ll typically find out within 30 days whether your application has been approved or declined. 


Who Is Exempt From Seeking FIRB Approval?

FIRB applications are generally only required for non-residents or temporary residents looking to purchase property in Australia. So the following groups of people are exempt from applying for approval with the FIRB: 

  • Australian citizens (regardless of whether they live in Australia or not)
  • New Zealand citizens 
  • Australian permanent visa holders 
  • Foreigners buy property as joint tenants and are married to someone who belongs to one of the above groups. 


How Can Property Tax Specialists Help?

While this article provided guidance as to the process of applying with the FIRB, there is a lot to consider before investing in property in Australia as a foreigner. For example, you’ll have to pay taxes such as stamp duty on your new property. And if you’re buying an investment property, you’ll likely have to pay income tax on the rental income that you generate. 

You also have to consider that you may have to pay capital gains tax should you decide to eventually sell the property. 

So you’ll need to engage the services of an Australian tax agent to help you navigate the complex world of Australian tax. 

Property Tax specialists are a team of qualified accountants with the objective to legally minimise your tax liability and protect your assets.  We offer a range of services to help our clients achieve their goals,  including cash flow and profitability analysis, investment property portfolio administration, and regulatory compliance.


Key Takeaways 

The Australian government has strict rules about who can purchase what type of property, so be sure that you are compliant with these rules and regulations before you get started.

Foreign investors can purchase residential property in Australia but only subject to the Foreign Investment Review Board’s approval, and you’re limited to new buildings and vacant land. 

To discuss any matter relating to buying an investment property as a non-resident, asset protection or your tax affairs, get in touch today.



DISCLAIMER: This information has been prepared without taking into account your objectives, financial situation, or needs. Because of this, you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation, or needs. 


Amir Ishak is a Limited Authorised Representative 1269908 of Merit Wealth Pty Ltd, Australian Financial Services Licence 409361, ABN 89 125 557 002[/vc_column_text][/vc_column][/vc_row]

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