FIRB rules on purchasing property in Australia

Purchasing property in Australia

While those who secure “Permanent Residency On Arrival” visas are exempt from the FIRB restrictions many remain subject to the rules.

The cost of emigrating on a temporary visa, leading to permanent residency after a probationary period should be taken into consideration when evaluating your preferred route to Australia.

While it is commonly accepted temporary residency visa holders make financial contributions to their children’s education. The cost of the FIRB is lesser-known and often overlooked.

FIRB – Foreign Investment Review Board

Australian Immigration laws have strict guidelines for foreign non-residents and temporary residents who wish to purchase a house in Australia.

The Foreign Investment Review Board (FIRB) is the governing body which ensures residential properties are bought in compliance with the Foreign Acquisitions and Takeovers Act (1975). In addition to the assessment of foreign purchase of residential property, the FIRB also assesses the foreign investment in Australian businesses, especially in agriculture and mining.

The FIRB serves as a control to prevent foreign investors from over-inflating residential property prices through excessive investment. As such a list of requirements was created to ensure local Australian interests are protected.

Case president

Back in March 2015, a Sydney residential property bought for A$39 million, the “Villa del Mare”, received instructions from the Treasurer of the Australian Government that it must be sold off. The purchase was found to be not compliant with the Foreign Acquisitions and Takeovers Act (1975), which requires foreign investors to notify the Treasurer through the Foreign Investment Review Board (FIRB) before purchasing residential real estate. Since then there have been additional properties that were found to be illegally purchased and forced to be sold.

Who is a Temporary Resident?

According to the FIRB, a temporary resident is an individual who:

  • holds a temporary visa that permits them to remain in Australia for a continuous period of more than 12 months (regardless of how long remains on the visa); or
  • is residing in Australia has submitted an application for a permanent visa, and holds a bridging visa which permits them to stay in Australia until that application has been finalized.

Temporary residents would include holders of the following Australian visas:

  • All temporary visas
  • Temporary Skilled Shortage Visa (subclass 482)
  • Business Innovation and Investment (Provisional) visa (subclass 188/888)
  • Student visas that are 12 months or longer, such as:
    • Independent ELICOS Sector visa (subclass 570)
    • Schools Sector visa (subclass 571)
    • Vocational Education and Training Sector visa (subclass 572)
    • Higher Education Sector Visa (subclass 573)
    • Postgraduate Research Sector Temporary Visa (Subclass 574)
    • Non-Award Sector visa (subclass 575)
  • Temporary Graduate visa (subclass 485)
  • Skilled Regional (Provisional) visa (subclass 489)

Previously, the 457 Temporary Work Visa would also be included until it was replaced by the TSS 482 Visa.

If your temporary visa is less than 12 months you are considered to be a foreign non-resident.

The FIRB rules

Residential properties are categorized as “new dwellings” or “established dwellings”

New dwellings

New dwellings are homes built on residential land which has not been previously sold as a dwelling and has:

  • not been previously occupied; or
  • if the dwelling is part of a development and sold by the developer, it has not been previously occupied for more than 12 months in total

A refurbished or renovated residence which was previously occupied is not considered to be a new dwelling. Vacant land bought for residential construction is deemed to be a new dwelling instead. As such, “Home and Land” packages are considered to be new dwellings too, as long as:

  • the development is completed within four years from the date of approval
  • evidence of completion is submitted to the FIRB within 30 days of being received

There are no conditions or limitations on the number of new dwellings that can be purchased by a temporary resident. Approval is generally required before the purchase is made.

Established dwellings

Established dwellings typically refer to residential properties that are on the secondary market. If a residential property is constructed and occupied, it is usually considered to be an established dwelling.

Temporary residents can purchase ONE established dwelling to live in as their primary residence in Australia. The property should not be used for leasing. The property also should be sold within 3 months if the temporary resident moves out of the established dwelling. In other words, an established dwelling cannot be purchased by a temporary resident to be held as an investment property.

Additionally, temporary residents who want to purchase an established dwelling for redevelopment must seek prior approval from the FIRB before purchasing the property.

The headline cost

A visa holder purchasing a property will be subjected to more fees and higher rates/interest rates than an Australian citizen or permanent resident. Two fees every visa holder must factor in are the FIRB acquisition fee and the Stamp Duty.

FIRB acquisition fee

When lodging your application with FIRB you will be prompted to pay an acquisition fee.

Acquiring an interest in residential land where the price of the acquisition is:

  • $1 million or less: $5,600
  • $1 million to $1,999,999: $11,300
  • $2 million to $2,999,999: $22,700
  • $3 million to $3,999,999: $34,000
  • $4 million to $4,999,999: $45,400
  • $5 million to $5,999,999: $56,700
  • $6 million to $6,999,999: $68,100
  • $7 million to $7,999,999: $79,500
  • $8 million to $8,999,999: $90,900
  • $9 million to $9,999,999: $102,300
  • $10 million or higher: contact the Australian Tax Office for a fee estimate

View the full FIRB acquisition fee list here.

Stamp Duty

Foreign citizens who want to buy or invest in residential property in Victoria (VIC), New South Wales (NSW), Queensland (QLD), South Australia (SA) and Western Australia (WA) will need to pay a stamp duty levy and, in some states, a land tax surcharge.

Foreign Citizen Stamp Duty By State:

  • Victoria: 7%
  • New South Wales: 8% + 2% Land Tax
  • Queensland: 7%
  • South Australia: 7%
  • Western Australia: 7%
  • Tasmania: 3% + 0.5% Surcharge
  • Northern Territory: Currently no stamp duty

*Note: Please confirm true, up to date tax rates with state government as government bodies and tax rates do change.

There is also the possibility of being charged an annual vacancy fee. From 9 May 2017, foreign persons who purchase residential real estate will be subject to an annual vacancy charge where the property is not rented out or occupied for more than six months per year.

There are several fees, taxes, and rates that differ between states and the specific visa you are carrying. When buying a property in Australia, it is highly recommended that you speak with a professional tax agent/ the Australian Taxation Office, and an accountant to ensure that you are aware of all of the fees.

Informing the FIRB

The FIRB guidelines state you must have approval before a property can be purchased in Australia. 

An offer to purchase a property may need to be conditional on FIRB approval, which may lead to delays and the offer not being accepted or as attractive as others without such conditions. The regulations state that you must complete a separate application for each property you intend to purchase.

This issue can be mitigated by applying for what is called an ‘Exemption Certificate’.

An Exemption Certificate allows a foreign person to purchase one unspecified property within a six-month period. The exemption certificate means that you do not have to seek individual approval for each property you are interested in. More information is available from the Australian Tax Office.

Securing a mortgage

Where a mortgage is approved the interest rate will be higher.

Your status as a temporary resident may impact your ability to secure finance to purchase property in Australia. Financial institutions have different restrictions on the amount you can borrow depending on your visa type and status.

Being self-employed or a business owner may also have an impact on how much you can borrow.


Violation or “Breach” of the FIRB policies will incur a criminal and civil penalty.

Additionally, the property in question will be forced to be sold as the owner is deemed illegal.

As such it is best to comply with the FIRB policies and always contact the FIRB if you have any doubts about the procedures and requirements.

The benefit of buying a home

There is one potential benefit.

the criterion for the subclass 888 Business Investment Stream permanent business visa is that you must meet two of the following three requirements:

  • assets of AUD200,000 net value in your main business (or 2 main businesses) in Australia
  • personal and business assets in Australia of AUD600,000 net value
  • the equivalent of at least 2 full-time eligible employees in your main business

By meeting the first requirement for business assets and also buying property, meeting the second requirement should be straight forward considering the median price of a house in Australia is over AUD500,000.

This would achieve the two out three criteria meaning that the business may not need to employ two full-time eligible employees,

All considered, the cost often outweighs the potential benefits.

Flexibility & Control

Each year, the Australian federal and state governments review the 188 visa programme to ensure it delivers the best possible outcomes for Australia. Where deemed necessary changes are introduced without advanced notice. State governments open and close the investor visa stream within their respective jurisdictions as deem necessary to meet the local economic objectives.

That said, once an investor secures an invitation to emigrate (State Nomination), any future changes to the emigration policy will not affect their case.