Before purchasing any property in Australia, a foreign investor is required to apply for approval from the FIRB. But what exactly is FIRB and how do you go about getting FIRB approval? Let us break the process down into simple steps.
What is FIRB?
FIRB is short for Foreign Investment Review Board. They are a government body mandated to screen foreign investment applications. The board has been established to give Australian locals peace of mind that the real estate needs of locals are prioritized over foreign citizens. The regulations of the FIRB have become stricter over the years, but getting approved is not impossible.
Why is an FIRB approval needed?
With foreign investors moving at a fast pace in the past few years to acquire property in Australia, the government needed to intervene to make sure the real estate property supply won’t run out for locals. High demand for real estate properties can also cause their prices to rise, which can later make it unaffordable for Australian citizens and might greatly affect the economy. The FIRB’s work is therefore to make sure that the interest of the government and Australian citizens are protected.
Who are required to seek FIRB approval when buying property in Australia?
- Foreign investors
- Residents on temporary visa, such as:
- Spouse visa
- TSS visa (Temporary Skill Shortage Visa)
- Student visa
- 457 work visa
Need to apply for a visa? Learn more with our Visa information page.
When should I apply for FIRB approval?
You must seek FIRB approval before you acquire a property, but after you have chosen the property you want to buy. You must also have discussed this with the real estate agent or the seller of the property. This is because upon lodging your application, you must already know the location and price of the property before getting approved.
If the price of the property you are buying falls below the price you have declared in your application, the overpaid fees will not be refunded to you. However, if the price of the property goes above what you declared in your application, your FIRB approval (if approved) will not be accepted for this property.
What are the limitations?
Temporary visa holders are given the following limitations:
- You can only purchase a house given that you will live in it;
- The moment you decide to leave Australia, you will have to sell the property;
- If you want to purchase an investment property, you are only allowed to purchase newly built properties or vacant lands.
Foreign investors are only allowed to purchase certain types of properties. Read our article on the Types of Properties Foreign Investors Can Purchase for more information in this regard.
Are there any exemptions?
Those on temporary visa will not need to apply for FIRB approval if they are applying as joint tenants with an Australian citizen to whom they are in a spousal relationship with (de facto partner or married couples). However, this exemption does not apply if you are a joint tenant with an Australian citizen who is your parent, sibling or business partner.
Foreign citizens can also be exempted from application given that:
- The developer of the property you are eyeing holds an exemption certificate;
- The property is part of an inheritance;
- The property was awarded to you because of a divorce settlement or a court order.
Are there any fees associated with getting FIRB approval?
Yes. Before 2015, no fees were required. But by mid-2015, the government posed application fees to deter foreign investors from overpowering local real estate buyers.
The fees must be paid upon application. If the payment is not settled, the application will not be processed. The fee is calculated based on the value of the property to be acquired. Here is a table of the latest FIRB approval application fee for residential property:
FIRB Application Fees for Residential Property
|Property Value||Fees Applicable|
|$1 million AUD or less||$5,600 AUD|
|$1,000,001 - $1,999,999 AUD||$11,300 AUD|
|$1,000,001 - $1,999,999 AUD||$22,700 AUD|
|$2,000,001 - $2,999,999 AUD||$34,000 AUD|
|$3,000,001 - $3,999,999 AUD||$45,400 AUD|
|$4,000,001 - $4,999,999 AUD||$56,700 AUD|
|$5,000,001 - $5,999,999 AUD||$68,100 AUD|
|$6,000,001 - $6,999,999 AUD||$79,500 AUD|
|$7,000,001 - $7,999,999 AUD||$90,900 AUD|
|$8,000,001 - $8,999,999 AUD||$102,300 AUD|
|$10,000,001 or more AUD||Use the fee estimator.|
For acquisition worth more than $10 million, use the fee estimator by FIRB or get in touch with the Australian Taxation Office for more information.
There are different fees associated with farmlands, commercial property and business-related real estate purchases.
How do I pay for the fees?
You pay for the fee upon lodging your application. Payment options include the following:
- Government EasyPay
- Direct Debit
- Direct Credit
- Transfer from an overseas account
- Manual payment at the Australia Post
Upon application, you will be provided with a Payment Reference Number (PRN) which you will need to provide upon payment. Wrong PRN can cause delay in your application so make sure to provide the correct PRN, free of any space or hyphenation.
How do I file for FIRB application?
You only need to submit an application via the FIRB Notification application page. Keep in mind that you would need to use newer browsers for the page to work correctly. It may not function in older browser versions such as IE 8.
Is there a chance my approval will be denied?
As long as you make sure you follow all the steps required by the FIRB, it should be safe. FIRB approves most of the applications they receive as long as the required information is provided and the fee is paid accordingly.
Do you need assistance in getting FIRB approval? Contact us and we’ll help you out.