There are certain requirements for foreigners owning residential property in Australia. Generally, foreigners can only purchase new residential dwellings in Australia. To be more specific, a new residential dwelling is a dwelling that will be, is being, or has been built on residential land, has not been previously sold as a dwelling, and has either:
- not been previously occupied; or
- if the dwelling is part of a development (50 or more dwellings) and was sold by the developer of that development, has not been previously occupied for more than 12 months.
An established dwelling is a dwelling on residential land that is not a new dwelling. Foreigner is normally not allowed to purchase established dwelling except in the following cases:
- Buying an established dwelling to live in as a temporary resident. Further requirements under this circumstance include the foreign buyer’s visa must be at least 12 months or more at the time they purchase the property. Moreover, the foreign buyer must not rent any part of the property, including ensuring that it is vacant at settlement. And lastly, the buyer must sell the property within three months from when it ceases to be their principal place of residence unless that buyer becomes a permanent resident in Australia (PR) or an Australian citizen by then.
- Buying an established dwelling to demolish and develop more dwellings. Because the aim of the foreign investment regime is to encourage new housing construction, the buyer can apply to purchase an existing dwelling if that buyer is planning to demolish that established dwelling and build new housing. The condition is that the buyer must build and supply additional new housing, ie. Replace 1 house with 3 townhouses. In this case, the foreign buyer will need to contact a town planning developer to double-check any pre-approval from the council in this regard. Further requirements under this circumstance include that the existing dwelling cannot be rented out prior to demolition and redevelopment. Moreover, the existing dwelling should be demolished and construction of the new dwellings must be completed within four years of the date of approval. And lastly, evidence of completion of the dwellings must be submitted to the Foreign Investment Review Board within 30 days of being received by the foreign buyer. This could include a final occupancy or builder’s completion certificate.
The same requirements apply for foreign transferees in transactions where the consideration is by way of gift.
Strict penalties (including civil and criminal penalties and disposal orders) may apply for breaches of any of Australia’s foreign investment rules. Such penalties can also be imposed upon any party, such as real estate agents or others who assist in or are involved in any such breaches. Being aware of the regulations that govern foreigners owning residential property in Australia will keep you safe from any risk of penalty.
If you have any further questions or want to enquire about buying property in Australia, contact RCR Lawyers now.
The blog published by Rostron Carlyle Rojas Lawyers is intended as general information only and is not legal advice on any subject matter. By viewing the blog posts, the reader understands there is no solicitor-client relationship between the reader and the author. The blog should not be used as a substitute for legal advice from a legal practitioner, and readers are urged to consult RCR on any legal queries concerning a specific situation.