FIRB stands for Foreign Investment Review Board, a body established under the Foreign Acquisitions and Takeovers Act 1975 (Cth) (“FATA”) that reports to the Treasurer. FATA requires that certain investments in Australian businesses, entities, or land be reviewed by FIRB beforehand. Its main purpose is for the government to monitor foreign investment and ensure such investments benefit Australia. Restricting purely foreign investors from acquiring existing property is intended to prevent speculative buying that would drive housing prices up unreasonably.

Only a “foreign person” as defined under FATA needs to obtain FIRB approval. This “person” can be an individual, a company, a foreign government, or similar entity. This article focuses mainly on individuals buying property, where the definition generally refers to “an individual not ordinarily resident in Australia.”

Who does not need FIRB approval?

Australian citizens, whether ordinarily residing overseas or within Australia, do not need FIRB approval to purchase new property, existing property, or vacant land, whether for owner-occupation or investment.

Foreign citizens holding any class of Australian permanent resident visa do not need FIRB approval to purchase new property, existing property, or vacant land, whether for owner-occupation or investment.

New Zealand citizens do not need FIRB approval to purchase new property, existing property, or vacant land, whether for owner-occupation or investment. However, if they are not in Australia at the time of contract exchange, they may be required to pay the foreign buyer stamp duty surcharge depending on the requirements of the relevant state or territory.

Who needs FIRB approval?

1. Holders of Australian temporary resident visas (including two-step provisional PR visas such as 482/489/491/820/309, etc.) need FIRB approval, and:

– They may purchase only one existing property, which must be used as their principal place of residence; if it ceases to be their principal place of residence, the property must be sold; or

– They may purchase property as an investment, but such property must be new property or vacant land for the construction of new property.

Please note: If a temporary visa holder purchases property jointly with an Australian citizen as Joint tenants (where the spouses hold equal 50/50 shares in the property) and the two are in a spousal relationship (including legal marriage and de facto relationships, whether opposite-sex or same-sex), FIRB approval is not required. However, if the relationship with the Australian citizen is of another kind, such as business partners, parent and child, siblings, other relatives, or friends, FIRB approval is still required.

2. Foreign investors need FIRB approval, and any property acquired for investment purposes must be new property or vacant land for the construction of new property — not existing property. Once purchased, the property may be rented out to others (including, for example, children or relatives studying in Australia).

Where a foreign investor purchases property together with an Australian citizen or Australian permanent resident as spouses, please contact an NS Legal lawyer for detailed advice on the specific FIRB position.

Owner-occupation vs. investment, switching between the two

If you hold an Australian temporary resident visa or are a foreign investor, the restrictions on owner-occupied and investment property are as follows:

If you hold an Australian temporary resident visa, you may:

– Purchase new property or existing property;

– If you intend to leave Australia long-term after your visa expires, you may be required to sell the existing property;

– If you subsequently obtain permanent residency, you may continue to hold the property.

If you are an overseas investor, you may:

– Purchase new property or vacant land for the construction of new property as an investment. Without an Australian visa, it is generally unlikely you will be permitted to purchase an owner-occupied home.

If you are an Australian citizen or permanent resident but have been settled overseas long-term, it is important to demonstrate your ability to service the debt after purchasing property in Australia.

FIRB application fees

The fees charged vary according to the value of the property or land you intend to purchase. Please refer to the table below:

Residential land —

Under AUD 1 million: AUD 6,350

AUD 1 million to under AUD 2 million: AUD 12,700

AUD 2 million to under AUD 3 million: AUD 25,400

Note: Application fees are subject to update. The actual fees at the time of application should be taken from official sources.

Materials required for a FIRB application

Requirements generally differ depending on the type of purchase — please refer to the FIRB Application Checklist for details. For example, for residential property investment, you may first need to complete the Residential real estate application form before purchase and wait for approval. After settlement, you will need to complete the land and water registration form.

Finally

Please note: FIRB approval can only be applied for after the specific property to be purchased has been identified — not pre-applied for before planning to buy. If you are concerned about being unable to complete the purchase because FIRB approval is not granted, we recommend adding an additional clause when signing the contract allowing you to withdraw from the purchase if FIRB approval is not obtained.

If you have any related questions, we recommend contacting our NS Legal lawyers for advice.