Purchasing or selling a property in Australia is a complicated matter. And it should be; after all, it will be one of the largest transactions you undertake in your lifetime. But in the process, it can be easy to lose track of all the steps you have to take in order to ensure that everything done remains legal and above-board.
Depending on your situation, that may include FIRB approval. Keep reading to better understand what that means, and how you can make sure that your property transfer remains legal at all times.
What Is FIRB?
FIRB is an acronym that is short for the Foreign Investment Review Board. It is an entity managed by the Australian foreign government, put in existence to ensure that all foreign investments in Australian property are recorded and conducted properly.
According to its website, FIRB‘s responsibilities are to
- examine proposed investments in Australia that are subject to the Policy, the Foreign Acquisitions and Takeovers Act 1975 (the Act) and supporting legislation, and to make recommendations to the Treasurer and other Treasury portfolio ministers on these proposals;
- advise the Treasurer on the operation of the Policy and the Act;
- foster an awareness and understanding, both in Australia and abroad, of the Policy and the Act;
- provide guidance to foreign persons and their representatives or agents on the Policy and the Act;
- monitor and ensure compliance with the Policy and the Act; and
- provide advice to the Treasurer on the Policy and related matters.
Who Will Need FIRB Approval?
As a result of the above, two types of individuals looking to purchase property will need to apply for FIRB approval:
- Temporary residents in Australia. This includes anyone who holds a visa for Australia enabling a stay for at least 12 months, as well as those holding a bridge visa on their path to permanent residency in Australia.
- Foreign investors, who are limited to purchasing only property in Australia that is either new or purchasing land on which new property must be built within one year.
Temporary residents are only allowed to own one property at a time and will need to sell that property when they no longer live in it. Some exemptions to the above two categories who will not need FIRB approval are citizens of New Zealand, temporary residents purchasing property with their permanent resident or citizen spouse, and certain designated residential properties in tourism-heavy areas.
The Cost to Apply for FIRB
The cost to apply for FIRB approval can vary widely and are largely based on the total cost of the property in which you are interested.
Any residential property with a value under $1 million incurs a fee of $5,000. That fee, of course, rises significantly – to the point where a property between $9 and $10 million will cost just over $90,000.
For business investment, the costs change based on the purpose of the land. Fees for agricultural lands tend to follow residential fees while acquiring an interest in a mining or production tenement will cost at least $25,000.
In addition, a variety of other factors can impact the fees you have to pay. Exemption certificates, variations of exemption certificates, and reorganisations can all result in additional fees that need to be accounted for. The FIRB offers a fee estimator on its website to help you better understand the cost of applying for approval.
How Can I Apply for FIRB Approval?
Applying for FIRB approval can be done directly through the board’s online system. Be careful: if any information on the application is incorrect, you might have to apply again – resulting in both potential delays and additional charges. Getting it right the first time, as a result, is absolutely vital.
Foreign investors looking to purchase commercial property can also follow the FIRB‘s Business Application checklist. This list helps you better understand your various responsibilities, allowing you to make more informed (and accurate) decisions on your application.
Approval from FIRB is only possible if you know the specific property that should be involved in the sale. At the same time, the application on its own takes a while, which is why it makes sense to apply as soon as you know which property you want to purchase. That way, you have plenty of time for the paperwork to go through as you engage in the details of the property transfer.
Who Can Help Me Complete My FIRB Application?
Because of the complicated nature of purchasing property, you probably work with external professionals to ensure that everything goes smoothly and according to the book. Especially as a foreign person investing in Australian property, getting that paperwork becomes absolutely crucial to a successful transaction.
Failure to secure the proper approval can lead to financial penalties and even criminal charges. Engaging with the right professionals help you stay in the clear and ensure the legality of the actual transaction.
That’s where conveyancing enters the picture. If you find the right conveyancer, you can trust in the fact that every aspect of your transaction will be completed correctly. As long as the conveyancer is licensed, a solicitor, or a lawyer, you know the background to ensure the legality of the transaction exists.
That, in essence, is the core function of conveyancing. By taking some of the necessary steps to complete a transfer out of your hands, you can ensure its correctness. Especially as a foreign international needing to adhere to FIRB regulations, that expertise becomes an absolutely necessary safeguard.