Summary
On 10 December 2023, the Federal Government announced its intention to increase 3 times the current FIRB application fees (Foreign Investment Review Board) to purchase established dwellings and increase vacancy fees 2 times for foreign-owned properties.
The current FIRB application fees for vacant land and new residential dwellings remain unchanged.
This proposed increase of FIRB application fees is very significant, given the Federal Government only doubled FIRB application fees on 29 July 2022 (https://foreigninvestment.gov.au/sites/firb.gov.au/files/2022-07/G10_Fees_210722.pdf).
Proposed 3x FIRB application fees for established dwellings
If you are a foreigner and you want to purchase residential property in Australia, you must obtain FIRB approval. Whether you are permitted to purchase an established dwelling depends on the type of visa that you hold. For example: if you are on a student visa (sub-class 500), you are permitted to purchase one established dwelling to live as your main principal place of residence, whereas if you are on a tourist visa you are not permitted to purchase such property.
The FIRB application fee depends on the purchase price, the higher the price the higher the fee and it goes in $1M bracket. If you purchase up to $1,000,000, the current fee is $14,100; for purchase price of up to $2,000,000, the fee is $28,100.
Now the Federal Government wants to increase FIRB application fees for the purchase of established dwellings by 3 times, that is, if the purchase price is up to $1,000,000, the proposed application fee is $42,300.
The Federal Government has not yet stated whether the proposed increase would also apply for property developers who purchase established dwellings to redevelop into new housing.
Proposed 2x vacancy fees
If you are a foreigner and you own a property in Australia, you are required to lodge vacancy fee return every year. If your property is not occupied or not genuinely available for return, for at least 183 days in a 12-month period, you could be liable to pay an annual ‘vacancy fee’.
The vacancy fee is generally equal to the FIRB application fee that you paid.
The Federal Government wants to increase by 2 times the annual vacancy fee. The intention is to encourage foreign investors to make their unoccupied residential properties available to renters.
Disclaimer: This article is to provide general information. You should not rely as legal advice. Formal legal advice should be sought for your own circumstances.
