Welcome to part 4 of our Buy Property in Australia from Overseas Series. This week will be about Foreign Investments Review Board Info. To read other posts in this series, you can visit:
International investors who wish to secure real estate holdings in Australia must first be recommended to the treasury by the Foreign Investments Review Board (FIRB). Any international investor interested in non-residential land that’s currently unoccupied, residential real estate, shares in land corporations, or investments made by overseas governments will be required to go through the FIRB before being able to secure any Australian real estate holdings.
In most cases, the review board reviews and approves investors within a bout a month. In a few select cases, especially those where the board has concerns or needs additional information from the investor, it can take up to three months. Investors rejected by the Foreign Investments Review Board have raised red flags when it comes to Australia’s national security or the board doesn’t feel the investment is good for Australia’s national interest.
How the FIRB Review Board Operates
Once you know you want to purchase real estate in Australia, you will need to send in an application for approval. There are a few types of acquisitions exempt from approval, so make sure that you actually need approval before going through the process. The board will not send out any information regarding exemption status, so it’s up to you to determine if you’re investment is exempt from approval. Investments commonly exempt include those made by a permanent resident, a foreign investor with a spouse who is an Australian resident, purchases from a developer who has agreed to sell brand new homes to foreign investors, and timeshare investments.
The board will not review any applications where the applicant has not already determined which property they want. You must have a property picked out and apply for approval on that specific property. The board will also not look at applicants who are applying to invest in a residential property they don’t plan on living in, as foreign applicants must expect to live in any residential property they purchase.
FIRB Application Process
The Foreign Investment Review Board accepts residential approval applications via email and provides the necessary link on the official government website. If you’re purchasing commercial property, the board prefers that you send your application in via email or fax. Once you’ve sent in all of the necessary forms, you will receive an automated response letting you know that the board received your application. Typically, you can expect a response within 30 days regarding your approval.
Consequences of Bypassing Board Approval
Any real estate agent in Australia will tell you that you need FIRB approval before buying a home, unless you meet the criteria for exemption. If, for some reason, you fail to garner approval before acquiring a home, you may end up having to pay large penalty fines. This doesn’t mean you can’t negotiate a contract for a property before approval. It simply means that part of the contract terms must state that the contract is dependent upon FIRB approval. Since the board approves the majority of applicants, getting approval just involves patience as you wait to finalise your contracts.
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