Financial Impact of Changes to FIRB
Foreign persons wishing to invest in Australia need to be aware of the financial impact the recent changes being introduced from 1 April 2024 (or the day after that Bill receives Royal Assent, whichever occurs later) will have on them.
Application fees for established dwellings (excluding commercial residential premises) will be tripled, and indexed annually. Below is a sample of the application fees.
| Home Value at time of acquisition | Current FIRB application fee for an established dwelling | New FIRB application fee for an established dwelling |
|---|---|---|
| $1m or less | $14,100 | $42,300 |
| $2m | $28,200 | $84,600 |
| $5m | $112,800 | $338,400 |
| $20m | $535,800 | $1,607,400 |
| $40m or more | $1,119,100 | $3,357,300 |
Vacancy fees for properties acquired on or after 9 May 2017 which are not residentially occupied or genuinely available to rent for at least 183 days in any 12-month period have doubled. Below is a sample of the vacancy fees.
| Home Value at time of acquisition | Current vacancy fee | New vacancy fee for a new dwelling | New vacancy fee for an established dwelling |
|---|---|---|---|
| $1mor less | $14,100 | $28,200 | $84,600 |
| $2m | $28,200 | $56,400 | $169,200 |
| $5m | $112,800 | $225,600 | $676,800 |
| $20m | $535,800 | $1,071,600 | $3,214,800 |
| $40m or more | $1,119,100 | $2,238,200 | $6,714,600 |
When purchasing a property, we can assist with the acquisition and the application for FIRB approval.
FIRB approval is required by:
- Temporary Residents. A temporary resident is only permitted to purchase one established dwelling which must be used as a residence. Conditions are imposed on the application, which includes the requirement to sell the established home once they no longer live in the dwelling.
- Foreign Residents. A foreign resident can buy a new property or vacant land to invest but is prohibited from buying an established home as an investment property. A new dwelling can be purchased if it is rented to their child who is on a temporary visa.
Foreign persons can be exempted from obtaining FIRB approval, for instance:
- They are Australian Citizens and Australian expats. They can buy a property, including a new or existing property or vacant land for use as their dwelling or as an investment.
- New Zealand Citizens can also buy a new or existing property or vacant land for use as a dwelling or investment. They do not need to be in Australia at the time the contract is exchanged or at settlement. They may be subject to a foreign stamp duty charge.
- Temporary Citizen buying a property with their Australian spouse as joint tenants. However, FIRB approval is required if they buy the property with their spouse and register as tenants in common and if they purchase an investment property.
Our Property Department is willing to discuss your queries. You can contact us here.
The content of this article is intended to provide a general guide only. You should seek advice for your specific circumstances.
