FOREIGN INVESTMENT REVIEW BOARD ("FIRB") CHANGES
EFFECTIVE 1 DECEMBER 2015
Foreign persons are required to apply for FIRB Approval prior to
purchasing residential real estate in Australia. Currently, there
are no fees payable to FIRB by a buyer for the making of this
application. Beginning 1 December 2015, foreign
persons will be required to pay an application fee of $5,000.00 for
an individual approval to purchase residential real estate.
Developers can apply for advanced off-the-plan approval ( known
in the industry as a "Blanket approval") to sell new
apartments in developments of 100 or more lots. This saves foreign
buyers of lots in a development having to individually apply for
FIRB approval to purchase a proposed lot. Currently, no fees are
payable when applying for a Blanket approval which offers
significant benefit to Developers.
From 1 December 2015, Developers will be
required to pay an application fee of $25,000.00 when applying for
a Blanket approval. In addition to this fee, every 6 months
Developers will be required to disclose sales information to FIRB
and pay additional "maintenance fees". A breakdown of the
maintenance fees is below.
FIRB fee payable per Lot being sold to a foreign
A Lot less than $1,000,000.00
A Lot over $1,000,000.00*
* $10,000.00 fee increases incrementally by $10,000.00 per
$1,000,000.00 in property value. For example, for a property
$2,400,000.00 the FIRB fee payable is $20,000.00.
Applications for Blanket approvals submitted but not approved
before 1 December 2015 will not be subject to the
FIRB has also communicated verbally that the Developers who have
applied before 1 December 2015 for a Blanket
Approval will not be required to pay the additional maintenance
fees of the Blanket approval in respect of each sale to foreign
WHAT DEVELOPERS NEED TO CONSIDER
Developers with existing or pending large scale developments of
100 or more lots should consider the advantages offered by the
existing FIRB framework for Blanket approvals given the various
cost and market impacts imposed by the changes to FIRB from
1 December 2015.
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.
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