Changes to Australia's foreign investment landscape
By Elizabeth McDonald, McCabes Lawyers
Foreign investors in Australian real estate will need to ensure they comply with a raft of changes to Australia's foreign investment framework, while the signing of the China and Australia Free Trade Agreement expands opportunities for Chinese investment in Australian property.
The Australian Government has introduced significant reforms to its foreign investment framework, including changes to the regulation of Australian real estate ownership.
Foreign private investors now need approval to acquire rural land valued at over AUD 15 million, a significant drop from the previous threshold of AUD 252 million. This applies to the cumulative value of rural landholdings, meaning even small investments could still be scrutinised. Higher thresholds exist for certain free trade partner countries.
In addition, foreign investors must now register all Australian agricultural landholdings with the Australian Taxation Office.
The Government has increased its focus on enforcement and has forced some foreign investors to sell residential properties. An "amnesty" period, ending on 30 November, has been established to encourage the voluntary disclosure of inadvertent residential real estate investment breaches. Despite the changes, the Treasurer has announced that Australia is still "open for business".
Another development has been the signing of the China and Australia Free Trade Agreement in July 2015. This coincides with China becoming the largest country for approved investment in Australia last financial year. Australia has retained the right to impose the AUD 15 million threshold on private Chinese investment in agricultural land, while the threshold for direct investment in developed non-residential commercial real estate will be AUD 1,094 million.
Elizabeth McDonald
McCabes Lawyers, Newcastle, Australia
E: This email address is being protected from spambots. You need JavaScript enabled to view it.; W: www.mccabes.com.au
Elizabeth McDonald is a Senior Associate in the McCabes property group. She regularly provides property due diligence advice to foreign investors and recently acted in the sale of a 39,000 hectare cattle station to a foreign owned company. She also has significant experience in commercial and residential real estate, property development, rural and agricultural land, mining tenements, Aboriginal land rights and native title.
McCabes is a multi-disciplinary law firm with significant experience in acting for international clients and in cross-border transactions. With a focus on technical excellence, McCabes provides astute and commercial legal solutions for its clients.
Published: October 2015 l Photo: Colourbox.de - Curioso Travel Photography