The issue of foreign ownership of land in Australia has become more focused. The Australian Government has an interest via the Foreign Investment Review Board (FIRB), which decides whether a foreign purchaser is eligible to acquire land in Australia. The FIRB’s power extends to ordering a transfer of land be reversed if the prior consent of the federal Treasurer has not been obtained. Foreign investors should apply to the FIRB before entering into an agreement to purchase property; the cost of this application is approximately $5,000.
The state of Victoria has an interest via the Duties Act 2000 (Vic). If a purchaser of property in Victoria is not one of the following:
• an Australian citizen;
• the holder of a permanent visa;
• a New Zealand citizen holding a special category visa (sub-class 444),
then the State Revenue Office (SRO) will assess the duty payable on the transfer and add 7 per cent. This rate applies to contracts entered into after 1 July 2016. Contracts entered into after 1 July 2015, but before 1 July 2016, incur an additional duty of 3 per cent. This applies to all transactions entered into or after 1 July 2015 where the transferee is a foreign person at the time of the transaction (usually at settlement).
Each purchaser must have their identity verified by their conveyancer or by a qualified agent to determine if the additional duty applies.
The transferee can be a natural person, a corporation, or a corporation acting as a trustee.