What is available to buy?
Foreign investors are allowed to purchase commercial properties, newly developed residential property or vacant land for the purpose of development of residential real property in Australia. If the investor obtains a temporary resident visa in Australia allowing them to reside in Australia for period of more than 12 months then they may also acquire one established property and it must be used as their residence (home) but such proposals are often subject to conditions such as, that the temporary resident sells the property when it ceases to be their residence.
The investors would also pay stamp duty tax at an average rate between the range of 0.3% to 3% of the purchase amount. The rate depends on the state where the property is located and the value of the property. The investors may also have to pay an annual land tax if they own property worth more than a certain threshold amount. If the investment property is leased to tenants then the investor would have to account for the rental income in their annual tax obligations in Australia. Australia is signatory to double tax treaties with many countries around the world which would prevent investors from incurring double taxes.
Entering into contract
Each state and territory of Australia have their own laws and process in relation to the purchase of property. It is recommended that the purchaser seek legal advice from Australian solicitor before committing to the purchase of property by signing the contract. Most of the purchase contracts would usually require 10% of the purchase price to be paid as deposit at the signing of the contract and the balance would be payable on completion of the sale. There should be agreed time between the signing and completion date noted on the contract. In case of off-the-plan property contract (property which has not yet been constructed or registered to lands department), the time between the signing and completion could be a number of years depending on the period of construction.
Foreign Investment Review Board
All proposed purchases of commercial and residential real estate in Australia is subject to review by Foreign Investment Review Board. There are fees payable for each of the application. The contract for sale of a property would generally be subject to Foreign Investment Review Board approval. The purchaser would enter into the contract for sale first and then make the application to the FIRB for their approval. In the case the approval is not granted, the purchaser would be able to terminate the contract and receive their deposit back.