There is a common set of rules for foreign investment regulated by the Commonwealth Government and operating throughout Australia. The Foreign Acquisitions and Takeovers Act 1975 restricts foreign interests from buying significant business real estate without the approval of the Foreign Investment Review Board (FIRB). The Act defines ‘foreign interest’ as a natural person not ordinarily resident in Australia (excluding an Australian resident overseas) or a company that is no more than 15 per cent owned by a foreign national or 40 per cent owned by a number of foreign nationals.
The legislation does permit new developments to be pre-approved for foreign investment purposes, saving agents’ time when negotiating with foreign entities. Contracts for the purchase of property without FIRB approval are still enforceable and the FIRB can seek the forced sale of property that has not been approved.
In relation to residential property, a foreign resident cannot buy an established residential dwelling in Australia, either directly in their name or through a trust relationship or company structure. Penalties apply for breaching this rule.
Foreign residents can buy other types of Australian residential property, such as new dwellings, vacant land and property that is to be redeveloped, but must first get approval from the Foreign Investment Review Board.
A temporary resident can buy an established dwelling if it is used as their residence in Australia and if they can get approval from the Foreign Investment Review Board.