Foreign Investment in Australian Land

Regulation of foreign investment in Australia is a fundamental concern of the government and an issue of increasing importance in Western Australia. The primary decision-maker is the Treasurer, who administers the Foreign Acquisitions and Takeovers Act 1975 and implements Australia's Foreign Investment Policy on the advice of the Foreign Investment Review Board (FIRB). Commercial Property Acquisitions For developed commercial property, foreign persons must apply for approval to purchase, or take an interest in, any property valued at $54 million or more. If the real estate is heritage-listed, a $5 million threshold applies instead. Significant exception exists for New Zealand and United States investors, who only need to apply for approval for property valued at $1,078 million or more. Residential and Vacant Land Acquisitions Approval must be obtained for the acquisition by foreign investors of vacant land and residential property, regardless of the value of the real estate. Recently, there has been increased public concern that foreign investors are becoming more active in Australia's property market. On 19 March 2014, the Treasurer formally asked the House of Representatives Standing Committee on Economics to inquire into and report on foreign investment policy as it applies to residential real estate. The results of this inquiry are not yet available. Rural Land Rural land is defined as land used wholly and exclusively for carrying on a commercial business of primary production. A foreign investor only requires approval to buy an interest in a primary production business where the total assets of the business exceed $248 million (or $1,078 million for New Zealand and United States investors). In 2012, the FIRB included an annexure to the Foreign Investment Policy entitled "Policy Statement: Foreign Investment in Agriculture". The government does screen all foreign investment and the government is committed to ensuring on a case-by-case basis that investments do not adversely affect the sustainability of Australia's national agricultural resources. The policy for agricultural acquisitions is currently under review. The Opposition considers that the monetary thresholds are too high and it has proposed a review of the threshold to $15 million for purchases of foreign land. Leaker Partners is closely following this issue. While the government recognises that foreign investment has many benefits, it also acknowledges community concerns surrounding foreign ownership. Accordingly, the government has adopted a case-by-case approach where a 'national interest test' is applied. If a proposal is deemed contrary to the national interest, it will not be approved. Note: As a general rule foreign government investors require FIRB approval. ------------------ This video and statement contains general legal advice only and is current as at 19 June 2014. Further information may be obtained from Mark Leaker or Katrina Palmer of Leaker Partners on (08) 9325 2882 or info@leakerpartners.com.au