How foreign investment policy for Australian residential real estate has changed since the 1970s

How foreign investment policy for Australian residential real estate has changed since the 1970s
How foreign investment policy for Australian residential real estate has changed since the 1970s

1976

Under the government’s Foreign Investment Policy (at the time the primary mechanism under which real estate investment was screened), some acquisitions of Australian real estate by foreign interests were examinable. However, acquisitions of residential dwellings for the intended use by expatriate Australians and accepted migrants and transfers of real estate between immediate family members were not examinable.

The Foreign Investment Review Board was established to advise the government on foreign investment proposals.

1978

All acquisitions of real estate by a single foreign interest or associated foreign interests up to a cumulative value of less than $250,000 (since 8 June 1978) did not require approval. Proposals from foreign developers to construct and sell real estate developments (including exclusively to Australians) were subject to a minimum 50% Australian equity participation.

1981

All acquisitions of real estate by a single foreign interest or associated foreign interests up to a cumulative value of less than $350,000 (since 8 June 1978) did not require approval.

1985

All acquisitions of real estate by a single foreign interest or associated foreign interests up to an aggregate value of less than $600,000 (since 8 June 1978) did not require approval. Requirement of 50% Australian equity participation removed for developments that are minor (less than
$10 million) or short-term in nature (less than five years to complete).

1987

$600,000 threshold was abolished, with all proposed acquisitions of urban (including residential) real estate by foreign interests requiring approval regardless of size or value.

Advanced-off-the-plan category was introduced with a minimum requirement of four or more dwellings in a development provided that no more 50% of the units in any one project were bought by non-residents and subject to an undertaking by the developer to report all sales six monthly so that compliance with the 50% restriction could be monitored.

1989

Foreign Takeovers Act 1975 renamed Foreign Acquisitions and Takeovers Act 1975. Statutory backing given to the government’s Foreign Investment Policy, with existing restrictions requiring foreign persons to seek approval for the purchase of Australian urban real estate replicated in the Act.

1999

Advanced-off-the-plan certificates: only developers seeking advanced approval to sell up to 50% of a development with ten or more (previously four or more) dwellings to foreign investors could apply for advanced approval.

2008

The requirement for temporary residents to obtain foreign investment approval for real estate purchases was removed.

The 50% rule for the advanced-off-the-plan category was removed and replaced with a new requirement that the developer must market the development domestically and the minimum number of dwellings required in a development was increased to 100.

2010

The requirement that temporary residents need approval for real estate purchases was reinstated.

Source: Foreign investment in residential real estate: Treasury submission to the Inquiry into Foreign Investment in Residential Real Estate

Photo courtesy of Flickr/Creative Commons.

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