Can Foreigners Buy Properties in Victoria?

Foreigners can buy properties in Australia, including Victoria, provided they follow the Foreign Investment Review Board (FIRB) regulations. They should check the updated FIRB guidelines to ensure their purchase complies with the state’s property ownership laws. These have changed quite significantly over time including the fees payable.

To learn more, we highlight the essentials you need to know and answer relevant questions about foreign property investment.

What is the FIRB?

The Foreign Investment Review Board (FIRB) is an Australian Government advisory board that reviews and approves foreign investment proposals. Its approval process depends on the property a foreigner wishes to buy.

Aside from granting permission, the FIRB also implements specific rules regarding the types of real estate and investment property foreigners can purchase.

What Type of Properties can Foreigners Buy in Victoria?

In general, foreigners can purchase two types of properties:

new dwellings or apartments and houses without previous occupants
vacant land for development

With the FIRB’s guidelines, the government can keep foreign property investments aligned with the national interest.

Foreigners can buy a new property or vacant land in Victoria to create jobs for the construction industry. Moreover, the government also gains revenue through taxes and ensures that locals will not run out of properties to live or invest in.

However, note that some foreigners can buy established or second-hand properties if they meet the criteria set by the FIRB. For instance, a foreign investor may buy an established dwelling if:

there is intent to redevelop the property (i.e. building an additional structure to an existing property)
they sell the property when they leave Australia and if they’ve met certain Visa conditions

Those eligible to purchase established dwellings still need to apply for FIRB approval. Our previous article on FIRB approvals and foreign property acquisition has more details.

How Can Foreigners Apply for an FIRB Approval?

Once you have found the property you want to purchase, you can then apply for an FIRB approval. The following are the steps:

Submit a comprehensive application. Visit the Australian Taxation Office (ATO) website to read the guidelines, check eligibility, and access the necessary forms. The online application may ask for your visa status, financial capability, parties involved, and investment intentions. When done, pay the application fee specified on the site.
Give FIRB time to review your application. During the review period, the FIRB will assess your application’s economic benefit, potential security implications, and other factors. The review body may also consult relevant government agencies. Expect a notification from FIRB within 30 days.
Proceed with the property purchase. If the FIRB approves your application, you can now buy the property, following the conditions stated. Foreign investors should also comply with the reporting requirements, providing investment updates or changes to the original proposal.

You must not enter into an unconditional contract of sale without first obtaining FIRB approval as a foreigner.

What Other Requirements Should Foreign Property Buyers Submit?

Aside from an approved FIRB application, foreign purchasers may need to provide other documents before completing a property sale. The requirements depend on the state or territory, but generally, these include:

documents like a valid passport and proof of address for verification of identity
proof of ability to fund the purchase like bank statements and loan approvals
payment of additional duty depending on the property location and value

What Happens If a Foreigner Buys a Property in Victoria without FIRB Approval?

Depending on the breach action, hefty fines and imprisonment apply for foreigners buying Australian real estate without FIRB approval. However, lower penalties may apply for self-disclosed breaches. Real estate agents involved also face stiff penalties.

Guidance Note 14 has the details of the penalty amounts for non-compliance.

Are There Exceptions When Applying for FIRB Approval?

These individuals are exempt from FIRB approval application:

Australian citizens, regardless of their residence status
New Zealand citizens
Australian permanent visa holders
Foreigners buying a property as joint tenants and married to someone belonging to the above-mentioned exempted groups

Confidently Invest in the Australian Property Market with Proper Legal Guidance

Investing in Victorian real estate offers plenty of benefits and opportunities to foreigners.

However, the government also implements particular rules on what property type to purchase. In addition, foreign buyers need to seek FIRB approval, submit the necessary documents, and pay the required fees.

TNS Lawyers can provide the support you need to buy a property in Victoria with confidence and full compliance. Our experienced team will guide you through the application process, approval monitoring, and preparation for property purchase.