Things to Remember When Buying a Property in Australia as a Foreigner
The Australian property market has been attracting foreign investors in the last 12 months. Thanks to its high capital growth and the country’s favourable policies for real estate investors. However, like other foreign investment, there are certain regulations that investors should follow. So, before you jump on the real estate bandwagon, do your homework and know the rules. Here are what you should remember when buying properties in Australia as a foreigner.
Get the FIRB’s approval.
Foreigners who do not hold a permanent resident visa or a special category visa cannot buy any property in Australia without getting an approval from the Foreign Investment Review Board (FIRB) first.
The FIRB approval must specify the property you want to purchase. You cannot apply for a general or “in principle” approval. It can only be granted on a property you have specifically chosen.
This entails that the contract you sign with the seller must contain a clause stating that the purchase conditional and will only push through after the FIRB granted you its approval. Some sellers would be willing to give buyers up to 30 days for their permission to be granted or denied.
You cannot buy a pre-owned home.
It is important to remember that Australia’s foreign investment policy is designed to increase the country’s housing supply. So, you might never get an approval to buy a pre-owned unit, flat or house.
The FIRB only approves foreign purchases of vacant land, townhouses and house/land packages in a new development. And should you decide to buy a land, the FIRB will require that construction will start within the next 12 months from the time it has given its approval.
Make sure that your contract is conditional.
As mentioned earlier, an FIRB approval is necessary before any purchase takes place, which is why the contract you signed must be conditional.
If the contract you signed is not conditional and if you have not acquired the necessary approval before signing it, you may have to cancel the contract or sell the property.
Foreign investors caught flouting the FIRB regulations could face a 3-year imprisonment and a hefty fine.