The Foreign Investment Review Board (FIRB) administers Australia's foreign investment framework on behalf of the Treasurer. For property buyers who are not Australian citizens, permanent residents, or otherwise excluded from the foreign-person definition, FIRB approval is generally required before acquiring an interest in Australian real estate, including most commercial property and most residential property.
This guide covers when FIRB approval is needed, who is treated as a foreign person, the application process and fees, the conditions that commonly attach to approval, and the state-level foreign purchaser surcharges that layer on top of the federal FIRB regime.
FIRB is a federal regulatory layer. State foreign purchaser surcharges sit alongside it. Both apply to foreign-linked buyers, and the cost stack can shift the total acquisition by 5 to 10% of purchase price for commercial property and substantially more for residential.
Who Is a Foreign Person?
Under the Foreign Acquisitions and Takeovers Act 1975 (FATA) and the Foreign Acquisitions and Takeovers Regulation 2015, a foreign person is broadly:
- An individual who is not an Australian citizen and not ordinarily resident in Australia.
- A corporation in which a foreign person (or foreign government or associated entities) holds a substantial interest (20% or more of the issued shares).
- A trust where a foreign person (or persons together) holds a substantial interest in the trust (20% or more of the income or property).
- A foreign government investor (sovereign wealth funds and similar).
Permanent residents are generally treated as not foreign for residential investment but the rules for commercial vary by transaction type. New Zealand citizens have specific rules under the Closer Economic Relations agreement.
1 When FIRB Approval Is Required
Residential property
Foreign persons generally need FIRB approval before acquiring residential property in Australia. Most foreign purchasers can only buy new dwellings (off-the-plan or never previously occupied) or vacant residential land for development. Established dwellings are restricted to a small set of approved use cases (e.g., temporary resident principal place of residence, but only during residency).
Commercial property
FIRB approval is required for foreign persons acquiring commercial property where the dutiable value exceeds the relevant threshold. The threshold differs by country (Chile, China, Japan, Korea, New Zealand, Singapore, Thailand, and the United States receive preferential treatment under specific FTAs) and by type of investor (private vs foreign government).
Agricultural land
Agricultural land has its own thresholds, generally lower than commercial property. Specific rules apply to water entitlements and to agricultural land held by foreign government investors.
Vacant land
Vacant land for commercial or residential development generally requires FIRB approval regardless of value.
2 Application Process
Form and timing
Applications are lodged online through the FIRB online portal. The standard statutory decision period is 30 days, with a possible 90-day extension. In practice, simpler applications are processed faster; complex applications can take longer.
Information required
- Applicant details (foreign person identity, structure, ultimate beneficial ownership).
- Property details (address, type, intended use).
- Acquisition details (price, finance, intended completion date).
- Supporting documents (passport, company structure, tax residency).
Fees
FIRB application fees are indexed and updated periodically. Fees scale with the property value; the fee schedule is published on the FIRB website. For residential acquisitions the fees can be substantial (low five-figure to mid-six-figure depending on price band). For commercial acquisitions the fees are typically lower in proportional terms but still material.
3 Approval Conditions
Approvals are often conditional. Common conditions include:
- Development obligation. For vacant land, a requirement to commence and complete construction within a stated period (typically 4 years).
- Use restriction. Conditions limiting the property's use (e.g., residential vs commercial).
- Reporting obligations. Periodic reporting to FIRB on development progress, use, or beneficial ownership changes.
- Hold or disposal conditions. Conditions about how long the property must be held or how it must be disposed of in some scenarios.
Non-compliance with conditions can result in divestment orders and civil penalties.
4 State Foreign Purchaser Surcharges
Most Australian states impose a Foreign Purchaser Additional Duty (FPAD) on top of standard transfer duty, applicable to foreign-linked buyers acquiring residential property. The application to commercial property varies by state.
NSW
NSW imposes Surcharge Purchaser Duty on residential property acquired by foreign persons. The surcharge rate is set by the state budget and is updated periodically. NSW also imposes Surcharge Land Tax on residential property held by foreign persons.
Victoria
Victoria imposes Foreign Purchaser Additional Duty on residential property. The Absentee Owner Surcharge applies to all taxable land held by absentee owners, including commercial property.
Queensland
Queensland imposes Additional Foreign Acquirer Duty (AFAD) on residential property acquired by foreign acquirers. The Absentee Surcharge applies to land tax on residential property; the rules for commercial are state-administered.
WA, SA, ACT, Tasmania, NT
Each state and territory has its own foreign purchaser regime, with varying scope and rates. The state revenue office is the source of current applicable rates.
5 Practical Buyer-Side Considerations
FIRB application as a contract condition
If the buyer is a foreign person, the contract of sale should be subject to FIRB approval. The vendor accepts this condition because the contract is unenforceable against the buyer if FIRB approval is refused. Without a FIRB condition, the buyer carries the risk of an unenforceable contract.
Beneficial ownership disclosure
Trusts, companies, and partnerships with foreign-linked beneficial owners trigger FIRB. The buyer-side review must identify the ultimate beneficial owners and determine FIRB applicability before the contract is signed.
Stamp duty surcharge
Foreign purchaser surcharges add materially to stamp duty for residential acquisitions (typically 7% to 8% additional duty depending on state). Commercial buyers face lower or no surcharge in some states; this should be confirmed against the current state schedule.
Land tax surcharge
Recurring annual surcharges on land tax for foreign-held property add to holding costs. Modelling the holding-cost picture before purchase is part of the buyer-side framework.
6 Common Application Pitfalls
Last-minute application
FIRB processing times can exceed the standard 30 days for complex applications. Applying close to a contract settlement date risks settlement default. The application should be lodged immediately on contract signing.
Underestimating beneficial ownership tracing
Multi-layer corporate structures can hide foreign beneficial ownership. The buyer-side review should trace beneficial ownership through every layer to confirm FIRB applicability.
Forgetting state surcharges
FIRB is federal; state foreign purchaser surcharges are separate and additional. Both must be modelled in the total cost of acquisition.
Frequently Asked Questions
Do permanent residents need FIRB approval?
Generally not for residential property. For commercial property, permanent residents are typically not foreign persons and do not need FIRB approval. New Zealand citizens have specific rules.
Does FIRB approval guarantee state foreign purchaser surcharges do not apply?
No. FIRB approval is a federal threshold. State surcharges are administered separately by state revenue offices and apply based on the state's definition of foreign person, which may differ from the federal definition.
Can I buy through an Australian-incorporated company to avoid FIRB?
An Australian-incorporated company can still be a foreign person if foreign beneficial ownership exceeds the threshold. Substance, not form, drives the FIRB determination.
What happens if I buy without FIRB approval?
Acquisition without required approval is a contravention of the Act, and the property may be subject to a divestment order. Civil penalties also apply. Approval should be obtained before settlement.