Website - https://www.bermanbuys.com.au
FIRB - http://firb.gov.au
"Hello and welcome back to daily buying tips, I’m Dean Berman from Berman Buys.
Today were going to discuss what types of property foreign investors can purchase in Australia.
You may think why are foreigners allowed to buy property in Australia?
Isn’t it unfair for everyday Australians?
After doing a bit of research on the area I actually think it’s an area where a decent amount of logic prevails.
The reason foreigners can buy property according to the Foreign Investment Review Board or FIRB “is to increase Australia’s housing supply”.
The theory goes that the money from overseas, will help build new properties locally.
Without that money it would be hard to supply as many properties as we need, leading to upward pressure on prices.
The flow on benefits are through the construction process “new jobs will be created which will help support economic growth for everyday Australians”.
Effectively this money is helping companies to employ more people, who in turn can experience better wages and standards of living.
Foreign investment also increases government revenue from “stamp duties” and “other taxes”.
Here are some of the coolest findings on foreign investment:
As foreign investment is used to supply more housing, it makes sense foreigners can’t purchase established residential property in Australia because it’s doing the opposite.
This is why they can generally get an “exemption certificate” when purchasing off the plan property through a developer whose projects has more than 50 properties in a multi-level building, they can’t purchase house and land packages or townhouses.
The only time foreigners can get approval for established property, when it’s for redevelopment and at least 2 dwellings are built for the one demolished, the foreigner has to have approval before entering into an unconditional contract though.
Foreigners can buy vacant land for this same reason as they will be adding a house where there was none before, but need approval, the house needs to be built within 4 years to stop land banking. The approval fees increase with price.
If a foreigner lives in an Australian property for more than 6 months in a year, they will need to pay a vacancy fee which is to encourage greater levels of rental stock in the market.
Commercial property seems to be more relaxed, as foreigners can usually purchase commercial property without needing approval, if the value is generally below $266m.
Large penalties apply for breaching foreign investment rules, ranging from a few thousand dollars to a few hundred thousand dollars
All in all foreign investment policy seems to make sense to me when the rules are followed."