If you are not a permanent resident or citizen of Australia, there are restrictions as to type of property you are allowed to purchase. These rules are governed by the Foreign Investment Review Board (FIRB), and approval must be sought prior to property purchase.
These rules state that foreign nationals can only purchase residential property under the following conditions:
- Temporary or non-residents can purchase new properties from a developer or vendor, provided they have never been occupied or sold previously, and no more than 50% of the development is sold to foreign interest.
- Temporary or non-residents can purchase vacant land for development, as long as continuous construction commences within 2 years of approval, and the development adds 50% to the purchase value of the land.
The purchase of existing properties by non-residents is only approved if the purchase is for the purpose of redevelopment. Such approvals are evaluated on a case by case basis, and are subject to strict conditions:
- The development must increase the housing stock (that is, the number of dwellings).
- The redevelopment costs must be at least 50% of the acquisition cost or the current market value (which ever is greater).
- If the property is shown to be derelict or uninhabitable, approval may be granted for a single dwelling.
- Demolition and the continuous construction of the redevelopment must be commenced within 2 years of approval.
- The property must remain vacant from the approval application date to the completion of construction.
There are some exemptions to these rules, so for more information please visit www.firb.gov.au
Income Tax and Capital Gains Tax
There are requirements for non-residents to account for Income Tax and Capital Gains Tax on their Australian property investments. Don't be put off buying Australian property by all the tax requirements, our experienced financial team at EasyPlan Financial Services are here to help with all aspects of the financial management of your investment property.