Property & Investments
The purchase of Australian properties and businesses by overseas investors is becoming increasingly frequent and as a result changes to foreign investment rules, the process has now become more streamlined.
Persons who have an Australian Temporary Residence Visa are now able to acquire:
- An established dwelling for their own residence but not for investment purposes.
- Any new dwellings; and
- Single blocks of vacant residential land – this generally refers to a block of land on which only a single dwelling could be constructed. It does not include large tracks of land, e.g. for the purpose of subdivision or multiple adjacent single blocks, e.g. to develop a multi dwelling department complex.
The definition of “temporary resident- is quite broad in that it covers all foreign persons living in Australia on a valid visa irrespective of the expiry date of that visa. It does not include short term visitors or business visitor visas but does include people who are on bridging visas pending the outcome of a substantive visa application.
Foreign companies are permitted to purchase established dwellings for the use of their Australian based staff provided that they sell or rent the dwelling if it is expected to remain vacant for more than six months. There is no limit to the number of established dwellings which can be purchased, where required for employee accommodation.
In relation to the acquisition of assets other than real estate, generally speaking smaller proposals are exempt from notification and larger proposals are approved unless judged contrary to the national interest. When a notification is required it must be made to the Foreign Investment Review Board which in consultation with government agencies will determine whether the proposed investment is contrary to the national interest.
The concept of what is in the “national interest- is determined by having regard to the widely held community concerns of Australians. In recent times the Foreign Investment Review Board has been criticised for a lack of clear and specific guidelines as this makes it difficult to prepare submissions in support of an Application.
In relation to the acquisition of assets or shares, the types of proposals which should be notified to the government are:
- Acquisitions of interests in an existing Australian business or corporation which is valued above, $219,000,000. For investors from the United States, a threshold of $953,000,000 applies except for investments in prescribed sensitive sectors where the standard $219,000,000 threshold applies.
- Takeovers of offshore companies whose Australian subsidiaries or gross assets exceed $219,000,000. Again, for US investors, a threshold of $953,000,000 applies, except for offshore takeovers involving prescribed sensitive sectors where the standard $219,000,000 applies.
- Direct investments by foreign governments or their agencies irrespective of size, including proposals to establish new business.
- Acquisitions of shares in a company or trust that is considered an urban land corporation or trust, regardless of value.
- Proposals where any doubt exists as to whether they are notifiable.
Nevett Ford Lawyers has extensive experience in preparing and submitting applications to the Foreign Investment Review Board and would be happy to discuss the type of assist once we can provide to clients.