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Tuesday, February 20, 2018

Foreigner Buying a property in Australia : step 2

Step 2 – Confirm you qualify with the FIRB & negotiate 

When you’re a non-resident or a temporary visa holder, you’re legally required to get permission from the Foreign Investment Review Board (FIRB) to buy property in Australia.
Australian citizens, Australian permanent residents and New Zealand (NZ) citizens don’t require FIRB approval.
Getting FIRB approval is a simple process and usually takes up to two weeks from the date the application is lodged.
Fees can vary depending on the value of the residential property or land that you want to purchase:
  • $1 million or less: $5,000
  • $1 million to $1,999,999: $10,000
  • $2 million to $2,999,999: $20,000
  • $3 million or more: $10,000 per every $1 million
  • Agricultural land: You must notify FIRB when purchasing farmland worth $15 million or more so the fees can be substantial.
You won’t actually need to apply for FIRB approval until you’ve found a property.
However, you should investigate their requirements so that you don’t buy an ineligible property for foreign investors.

Negotiate the purchase price

As a general rule, Australian properties usually sell for up to 10% less than the listed price.
This varies depending on the market, location and type of property.
Properties in popular suburbs sometimes sell for more than the price that they’re advertised!
Some real estate websites will publish the “discounting percentage” for particular suburbs, which is the average percentage below the listing price that a property sells for.
If you’re using a buyer’s agent, they’ll help you to negotiate the price.
You can ask for a contract before signing and ask your solicitor or conveyancer to look at the contract and add any additional conditions if necessary.
A common condition is that the sale is “subject to FIRB approval” which allows you to cancel the contract in the unlikely event that you don’t get approval from the Australian government.
Each state of Australia has their own property laws, use your conveyancer or solicitor’s expertise to help guide you.
If the vendor allows a cooling off period, you can put a holding deposit and sign the contract.
Refer to your conveyancer or solicitor, they’ll let you know what checks you have to do before buying and will let you know when it’s safe to sign the contract to buy the property.
If you’re unable to get a loan during the cooling off period, your maximum penalty is the holding deposit, usually up to $1000.
Again, please check with your conveyancer or solicitor as this can vary across the different states.
If you plan to sign the contract prior to the cooling off period, ensure that the contract of sale includes the clause “subject to FIRB approval”, otherwise you’ll be breaching the law.