New $5,000 FIRB Fee To Impact Foreign Investors

dollar chrome symbolAs at 1st December 2015, there will be new fees for Foreign Investment Review Board (FIRB) applications.  A new $5,000 FIRB fee will impact most of our non resident investors.   The new FIRB fees will start at $5,000 for residential acquisitions less than $1 million, with an additional $10,000 for each million dollars that an acquisition exceeds $1 million.

Up until now FIRB approval has been a free service, but for those lodging an application from the 1st Dec 2015, the new fee scale will apply.

According to the FIRB some investors are exempt, but in general if you are a not an Australian citizen and do not hold a permanent resident visa then you will likely require FIRB approval and as such you will be impacted by this new fee.

The Federal Government expects that these new fees will contribute an additional $735 million in revenue annually, of which $200 million is expected to go towards establishing a specialist investigative and enforcement unit within the Australian Taxation Office, which will take over the real estate function of FIRB and be responsible for maintaining the new national register of foreign land ownership.

For foreign investors who are buying off plan property, they need to submit their FIRB applications once contracts issue to ensure that they have full FIRB approval prior to exchanging contracts, even if the property may not complete until sometime in the future.

Most of our non resident investors are purchasing our off plan apartments for amounts under $1 million, so the impact will be a flat $5,000 fee, which these investors should now be factoring in to their cashflow at around the time that they exchange contracts and pay the 10% of the purchase price on the property that they are investing in.

If you are a foreign investor you may like to visit the non resident investor section of our investor room for further general investment information.

Here’s a link to the new, FIRB fee schedule