Here at Ray White Ermington we understand the complexities and frustrations involved in purchasing property from abroad.
Purchasing a property in the Sydney real estate market is a wise decision that will provide substantial capital gains over the long term. Sydney is a world-class city with a multi-cultural population of over 4 million, a beautiful natural harbour, pristine beaches and was home to the 2000 Sydney Olympic Games.
Sydney provides investors with one of the best places to invest in real estate in the world. Australia’s economic growth rate continues to reach its target each year. A strong domestic economy, resilient to international shocks and with a stable government, provides an excellent platform for property investing.
Government Policy on Foreign Investment The Australian Government encourages foreign investment that is consistent with community interests. The Government recognises the significant contribution that foreign investment has made and continues to make to the development of Australia. Foreign investment provides scope for higher rates of economic activity and employment than could be achieved from domestic levels of savings. Foreign direct investment also provides access to new technology, management skills and overseas markets.
The largest number of foreign investment proposals in Australia involves the purchase of real estate. The Government seeks to ensure that foreign investment in residential real estate increases the supply of residences and is not speculative in nature. The Government’s foreign investment policy aims to directly increase the supply of new housing (ie, new developments – house and land, home units, townhouses, etc) and brings benefits to the local building industry and their suppliers.
Overseas / Australian Expatriate Buyers Whether you are returning home, relocating to Sydney or looking for an investment property, Ray White Ermington strives to make it as painless as possible. If you are purchasing an investment property, we can also help you secure a tenant and manage your property for you.
Who does not require Government approval?
•Australian citizens, residing in Australia or abroad;
•Holders of Australian permanent resident visas;
•Persons entitled to hold a special category visa, for example, New Zealand citizens; and
•Australian citizens and their foreign spouse when purchasing residential real estate in joint names as joint tenants.
Do I need Government approval to buy real estate in Australia?
You may need to apply for foreign investment approval if you are a foreign interest who is:
• Purchasing residential real estate (including established or new residential property, vacant land and hobby farms);
• Purchasing rural land;
• Purchasing developed commercial real estate;
• Making an application for designation as an Integrated Tourism Resort or Strata Titled Hotel;
• Purchasing vacant commercial real estate for development;
• Acquiring shares, business assets or dealing with some other interest in an existing company;
• Creating a new business or project; or
• Dealing with some other form of interest.
A foreign interest is defined as:
• A natural person not ordinarily resident in Australia;
• A corporation in which a natural person not ordinarily resident in Australia or a foreign corporation holds a controlling interest;
• A corporation in which 2 or more persons, each of whom is either a natural person not ordinarily resident in Australia or a foreign corporation, hold an aggregate controlling interest;
• The trustee of a trust estate in which a natural person not ordinarily resident in Australia or a foreign corporation holds a substantial interest; or
• The trustee of a trust estate in which 2 or more persons, each of whom is either a natural person not ordinarily resident in Australia or a foreign corporation, hold an aggregate substantial interest.
What type of property can foreign investors buy?
Vacant Land – Subject to an investor commencing construction within 12 months of FIRB approval.
Second-hand dwelling – Purchases of second hand dwellings by foreign persons are restricted to temporary residents with visas (more than 12 months) or investors making the dwelling their principal place of residence.
New dwellings – Ownership is restricted to no more than 50 per cent of the dwellings in a development being sold to foreign interests. For single dwellings, a developer must have another dwelling that is similar in construction and proximity.
Commercial – Purchase of commercial property is normally approved unless it is contrary to the national interest. This is determined by the Government on a case by case basis.
Other situations where FIRB approval is normally given includes:
• Foreign companies buying residences in Australia for their senior executives
• Foreign nationals temporarily resident in Australia for more than 12 months buying for their own use as a principal place of residence subject to the sale of the property when they cease to reside in Australia.
• Foreign nationals purchasing residential real estate as joint tenant with an Australian spouse.
Further details are available on the Foreign Investment Review Board website: http://www.firb.gov.au