Changes to Australia's Foreign Investment Framework
From 1 December the Government introduced major changes to FIRB ( Foreign Investment Review Board) applications.
Application fees will apply. For residential property the fee will be:
o $5,000 for property under $1m
o $10,000 per $1m of sale price for properties over $1m
Until payment of the fee, the application won’t be processed.
Fees may be waived or refunded if a waiver or refund is in the “national interest”. Further guidance about what this actually means will be provided before 1 December.
For auction buyers, approval can be granted to buy one property in a certain area for 6 months under one application. The buyer will need to know the maximum price they will bid to pay the correct fee. If the bid exceeds the approval, further approval (and further fees) will apply.
Developers can obtain an “Advanced off-the-plan certificate” if the development is over 100 lots but a single foreign buyer will be limited to a $3m investment.
The ATO will have responsibility for the FIRB applications while “sensitive proposals” will be considered by the Board.
Criminal penalties have increased and civil penalties have been introduced.
While buyers should still obtain approval for new properties, the application fee may now be a factor.