Australian residential property has always been popular for overseas investors looking for return and stability. To arrange the purchase of Australian residential property is not difficult, as long as you rely upon appropriate professional advice at different points in the process. It is absolutely necessary that you do meet the Foreign Investment Review Board (FIRB) requirements and seek appropriate approval for any purchase:
As Temporary residents
A temporary resident is a person who is residing in Australia and:
- Holds a temporary residency visa which permits them to stay in Australia for a continuous period of more than 12 months (regardless of how long remains on the visa); or
- Has submitted an application for permanent residency and holds a bridging visa which permits them to stay in Australia until that application has been finalized.
Temporary residents can purchase one established dwelling only to live in, which means this property must be used as their main residence in Australia; and they are NOT permitted to buy established dwellings as investment properties.
Temporary residents can buy new dwellings or vacant land to build new dwellings with approval. Such new dwellings proposals are normally approved without conditions, while vacant land for residential development applications are normally approved subject to conditions (such as, that ongoing construction begins within 24 months).
As Foreign non-residents
Foreign non-residents or short term visa holders can invest in Australian real estate only if that investment adds to the housing stock: – they cannot normally purchase established (i.e. second-hand) properties as either homes or investment properties, unless foreign citizens who operate substantial businesses in Australia, they may obtain approval to purchase established dwellings to house their Australian-based staffs. These approvals are normally given subject to conditions requiring the sale of the property in circumstances where, for example, the dwelling is unused for certain period of time.
Foreign non-residents can however apply to purchase new dwellings and these proposals are normally approved without conditions. Proposals for the purchase of off-the-plan properties under constructions or yet to be built, or vacant land for development will also normally be approved, subject to the construction of a dwelling commencing within a period of 24 months.
For foreign investors who are buying the property for family use, or eventual retirement, then the tax treatment is a little less important than if they do so for investment. Nonetheless, it is important and necessary to discuss with an accountant priorto any purchase.
While the Australian Government recognized the strong benefits of foreign investor buying Australian residential property, its foreign investment policies are designed to help maintain stability in the Australian property market.
If you would like to receive more information or arrange an appointment to discuss in more detail the prospect of investing in the Australian property market, please contact our office on (03) 9798 6622 or email firstname.lastname@example.org.
About the Author
Dancy is passionate in understanding her client’s businesses including getting involved in their business operations and providing appropriate Accounting and Tax solutions to ensure clients achieve their goals.
This article was produced by Zimsen Partners. It is intended to provide general information only in summary format on accounting, business advisory and taxation issues. It does not constitute accounting advice, and should not be relied on as such.