Recent changes to the Foreign Acquisitions and Takeovers
Regulations (1989) (Cth) remove an exemption that applied to
temporary residents buying residential land in Australia. Unless
such a buyer qualifies for another exemption, they are now required
to notify the Treasurer (through the Foreign Investment Review
Board (FIRB)) of the acquisition, and the usual
time frames for FIRB approval apply.
Exemptions from compulsory notification of acquisitions of
Australian urban land
1. Under the Foreign Acquisitions and Takeovers Act
(1975) (Cth), a foreign person must notify the Treasurer (through
FIRB) before it enters into a contract to acquire "Australian
urban land", and must allow up to 40 days from notification
before the purchase obligation in the contract becomes binding.
This obligation is commonly addressed by including in the sale
contract a condition precedent allowing for FIRB approval.
2. The Foreign Acquisitions and Takeovers Regulations
(1989) (Cth) exempt certain acquisitions of Australian urban land
from the compulsory notification regime.
3. Previously, an acquisition of residential zoned land by a
temporary resident (or a company or trust in which they have a
direct interest) was exempt from notification where the acquisition
a single residential block or vacant land zoned for no more
than one dwelling, and where the foreign person doesn't have an
interest in an adjoining block of vacant land; or
an existing single residential dwelling that is to be used as
the person's principal place of residence; or
a new residential dwelling.
That exemption has now been removed. So unless another
exemption applies, a temporary resident (or company or trust in
which they have a direct interest) buying residential land must
notify FIRB before it becomes bound to purchase.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
4. The remaining exemptions relating to acquisition of
residential land by a foreign person are as follows:
land on which a dwelling is under construction (or will be
constructed) where FIRB has certified that the particular developer
can sell the land to foreign persons (ie where the developer has
pre-approval from FIRB);
an existing residential dwelling (other than part of a hotel)
where FIRB has certified that the land can be sold to foreign
land purchased by an Australian citizen not ordinarily resident
in Australia; or
land zoned residential where the foreign person holds a
permanent visa or special category visa (but not a temporary
5. The changes took effect on 26 May 2010, and apply to any sale
contract entered into on or after that date.
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