New Australian foreign investment rules came into force on 1
December 2015 following the passage of the Government's
Foreign Acquisitions and Takeovers Legislation Amendment Bill
2015. These included new application fees, greater compliance
powers to the Australian Taxation Office ("ATO") and
increased penalties for non-compliance.
Applicants must pay the fee before their foreign investment
application is processed. If an application falls into a number of
categories, the category with the highest fee would apply.
Residential Real Estate
Generally, non-resident foreign persons are prohibited from
purchasing established dwellings in Australia. Temporary residents
can apply to purchase one established dwelling to use as their
residence while they live in Australia, which must be sold if the
property ceases to be their principle place of residence.
The following application fees apply:
Property valued $1 million or less - $5,000
Property valued over $1 million - $10,000 then $10,000 incremental
fee increase per additional $1 million in property value.
Property Developers of Residential Real
Property developers can apply for new dwelling exemption
certificates to sell new dwellings in a development of 50 or more
residences to foreign investors. However, if a single foreign
investor wants to purchase more than $3 million worth of apartments
in any one development then they will have to seek individual
approval. Additionally, developers will be required to market
dwellings in Australia as well as overseas.
Property developers will pay an upfront application fee of
$25,000 with a reconciliation of properties sold to foreign persons
based on above residential rates.
Commercial Real Estate
The threshold for office, industrial and commercial accommodation
requiring prior approval has been increased from $55 million to
$252 million (pegged to CPI) or $1,094 million for foreign
investors from the United States, New Zealand, Chile, Korea, Japan
and soon China.
The following application fees apply:
Vacant commercial land - $10,000
Commercial real estate - $25,000
A new agricultural land foreign ownership register has been
established, and the screening threshold for proposed foreign
purchases of agricultural land by private investors was lowered
from 252 million to $15 million.
Additionally, direct investments in agribusiness over $55
million will generally be screened by the Foreign Investment Review
Board. The threshold may vary depending on where the non-government
investors are from.
From 1 December 2015 the ATO will:
process applications received from foreign persons proposing to
invest in Australian residential land. Applications for purchases
of non-residential land will continue to be processed by the
be responsible for the Agricultural Land Register; and
collect all fees in relation to all foreign investment
A new regime of civil penalties will be introduced and the existing
criminal penalty regime will be expanded. The maximum criminal
penalties will be increased to $135,000 or 3 years'
imprisonment, or both for individuals; and up to $675,000 for
New civil penalties have been introduced with the maximum
penalties being dependent on the type of breach. These penalties
potentially extend to third parties who knowingly assist foreign
investors to break the rules. Under the new arrangement foreign
investors who fail to comply with the rules will not be able to
profit from doing so including forfeiting any capital gains made on
divestment of a property.
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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