The Assistant Treasurer, Chris Bowen MP, announced on 18
December 2008 administrative changes to the Government's
foreign investment guidelines for acquisitions of residential real
estate by foreign persons.
Currently, all foreign persons and non-residents including
businesses must notify the Foreign Investment Review Board (the
FIRB) of their intention to acquire residential real estate, and
must comply with postpurchase conditions on its use, development
Proposed changes to the foreign investment screening
The definition of "temporary resident" for FIRB
purposes as a person with a visa of at least 12 months duration
will be updated to cover temporary residents with shorter term
visas and long term bridging visa holders. Short term visitors, for
example, with tourist or certain classes of business visas will
continue to not be considered as temporary residents.
The restriction preventing student visa holders from purchasing
a property valued at over $300,000 will be removed. The rule
preventing temporary residents from purchasing more than one
established dwelling will be maintained.
Temporary residents will be exempted from notification of
proposed acquisitions of established residential real estate for
their own residence, new residential real estate and vacant
Streamlined administrative procedures will be established to
facilitate non-resident foreign persons notifying and receiving
approval for acquisitions of vacant residential land and new
dwellings. Streamlined notification arrangements will replace the
current administrative system which takes up to 30 days for
The definition of "new dwelling" will be extended to
include those that have not been sold but that have been rented for
no more than 12 months. This will provide more flexibility to
developers to temporarily rent out units until buyers are
Foreign companies will be allowed to purchase established
dwellings for the use of their Australian based staff.
The changes will be implemented progressively, with all changes
in force by early 2009. Additional details can be found on the
Foreign Investment Review Board website at www.firb.gov.au.
Impact on temporary residents and their employers:
In an environment where real estate prices appear to be falling
and interest rates have decreased, it may be tempting for your
expatriates to look at buying property in Australia.
If the assignee is receiving a Living Away From Home Allowance
(LAFHA) and they purchase and reside in a property, the LAFHA may
lose its tax exempt status.
If the assignee buys an Australian property as an
The rental income and expenses are taken into account in
determining their taxable Australian income. Negative gearing
losses will be available and this may have implications especially
where the assignee is tax equalised on their employment
The rental property will be treated as "taxable Australian
property" and will be subject to Australian capital gains tax
(CGT) at the time the property is sold. It remains subject to CGT
irrespective of the assignee's Australian tax status.
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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The Council announced planning policies to encourage more inner suburban retirement village and aged care development.
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