Three Rivers welcomes foreign investment. Unlike some other countries that place few or no restrictions on foreign buyers, Australia has always taken a regulatory approach to overseas property investors and to invest here, there are restrictions and you need to go through an approval process.
In Australia, non-resident buyers can only purchase new properties, not established ones and must pay an application fee and seek approval from the Foreign Investment Review Board (FIRB) prior to purchase. Currently, the fee would be $5,000 for a lot purchased at Three Rivers.
How can foreign buyers invest in Australian property?
Please visit FIRB Guidance Note 03 for general information.
For more information specifically on vacant land purchases see FIRB Guidance Note 19.
If you are a foreign investor, you are not allowed to buy existing homes but you can buy vacant land but you will first need to obtain approval from FIRB. You can apply for approval online and, while there is no limit to the number of new lots you can purchase, you will usually need to apply for approval before each purchase.
Foreign non-residents will generally be allowed to purchase vacant land for residential dwelling development subject to conditions. The conditions usually imposed are:
- the development must be completed within four years from the date of approval; and
- evidence of completion of the dwellings is submitted within 30 days of being received. This could include a final occupancy or builder’s completion certificate.
In exceptional circumstances where the development cannot be completed within the specified four years, the foreign non-resident could apply for a variation to the condition. The application for a variation must be made at least two months prior to the end of the period. A fee will apply for this. Variations will be considered on a case-by-case basis.
You will also need to pay an application fee which is $5,000 per lot purchased at Three Rivers Estate. You may be allowed to combine multiple lots into one purchase to reduce fees.
Finally, it’s also worth remembering that there are tax implications for investing in Australian property. Any rental income you receive from your investment will need to be declared on an Australian tax return and you’ll be required to pay Capital Gains Tax on any profit you make when selling the property.
The FIRB application process
Before you apply for approval to purchase an investment property, it’s recommended that you obtain expert legal advice to make sure you understand and comply with all the necessary legal requirements. Then, you can follow the steps below to apply for foreign investment approval:
- Visit the FIRB website and click on "Apply Now"
- Follow the link to the Australian Taxation Office’s foreign investment application form
- Fill out the application form with your contact details, passport, visa documents and any previous FIRB application reference numbers
- Provide the address and title details of the property you wish to purchase
- Read and sign the declaration
- Submit the application and pay the relevant fee
- A decision on your application is usually made within 30 days and you will be informed of that decision within 10 days
What if I’m an Australian resident living abroad?
If you’re an Australian resident living overseas and you want to buy an investment property in Australia, the good news is that the strict foreign investment laws don’t affect you. You are exempt from needing FIRB approval in a range of circumstances, including if you:
- Are an Australian or New Zealand citizen
- Hold an Australian permanent resident visa
- Have a spouse who fits into either of the above categories and the property is being purchased in both names as joint tenants
However, you’ll need to check whether lending restrictions imposed by the banks will have an impact on your ability to qualify for a home loan. This will depend on your residency status and the lender with which you apply for a loan.
For example, recent changes to NAB’s lending policy mean that it will only lend non-citizens and permanent residents up to 60% of the purchase price of a property. Foreign income is also discounted by 40% when NAB assesses your ability to keep up with loan repayments. This may make it difficult or not financially viable for you to invest in property in Australia, so familiarise yourself with all the rules and regulations before you look to buy.
To make sure you get everything right, we recommend that you seek legal and taxation advice to make sure you satisfy all regulatory requirements.