FIRB approval is mandatory when someone is a foreign acquirer and wishes to purchase or invest in residential land in Australia. It is critical that those who fall into categories requiring FIRB approval comply with all FIRB requirements.

 There are standard terms in REIQ contracts (residential and commercial) which assume that a buyer warrants that FIRB approval does not apply to the Contract. In the event this warranty is breached, the Seller can terminate the Contract. A purchaser must provide notice if they are subject to FIRB approval and follow the procedure as per the standard terms of the Contract to obtain approval.

 Who must apply for FIRB approval?

 A buyer of residential land in Queensland may be a foreign acquirer if they fall into one of the following categories:

 A person who is not a permanent resident of Australia or an Australian citizen; or

1. A corporation where one or more of the following holds a “substantial interest” in the corporation:
1. An individual not ordinarily resident in Australia; and/or
2. A foreign corporation; and/or
3. A foreign government; or
2. A trust where a trustee of the trust is a foreign entity.

Exemptions to FIRB approval

 There are certain persons who do not need FIRB approval prior to purchasing residential real estate in Australia. These include:

 Australian citizens;

1. New Zealand citizens;
2. A holder of an Australian permanent resident visa;
3. An individual purchasing property (as joint tenants) with their Australian citizen spouse, New Zealand citizen spouse, or Australian permanent resident spouse. Note this exemption does not include purchasing property as tenants in common.
4. An Australian corporation that would not be foreign if interests directly held in it by Australian citizens living abroad, Australian permanent visa holders, or New Zealand citizens were disregarded;
5. The trustee of a trust, if at the time of the acquisition, the trustee would not be a foreign person if interests directly held in it by Australian citizens living abroad, Australian permanent visa holders, or New Zealand citizens were disregarded; or 
6. A charity operating in Australia primarily for the benefit of persons ordinarily resident in Australia.

Exempt actions

 FIRB is also not required if acquired by a foreign person, regardless of citizenship or residency, if the real estate to be acquired is one of the following:

A new (or near-new) dwelling purchased from a developer that holds a new (or near-new) dwelling exemption certificate that allows the developer to sell dwellings in the specified development to foreign persons. The foreign person should ask, or have their legal representative ask for a copy of the exemption certificate for the development in which they are intending to purchase to determine if it covers their intended purchase. 

1. An aged care facility, retirement village, or certain student accommodation provided the interest is not above the relevant threshold;
2. A timeshare scheme where the foreign person’s total entitlement (including any associates) to access the land is no more than four weeks in any year; 
3. Acquired by will or devolution of law; 
4. Acquired directly from the Commonwealth, a State, a Territory, or local governing body, or an entity wholly owned by the Commonwealth, a State, a Territory, or a local governing body; and 
5. An interest in certain residential real estate in designated Integrated Tourism Resorts.

It is imperative that “foreign purchasers” for the purposes of applicable legislation are aware of their obligations when purchasing land in Queensland and the relevant applicable fees for their circumstances. 

 If you require assistance with a conveyancing or property matter and require guidance around FIRB requirements, please contact us for further information.