Changes to Australia’s foreign investment review framework have recently been announced to safeguard the national interest amidst the outbreak of COVID-19. While the changes are not intended to halt foreign investment, they may have consequences for all foreign investors and those who have business interests with foreign investors, such as developers of residential property.
The changes have abolished the monetary threshold for the review of foreign investments. Consequently, every foreign investor must apply to the Foreign Investment Review Board (FIRB) for approval, regardless of the value of the investment. Additionally, the ATO has the ability to extend application processing times from 30 days up to a maximum of 6 months to cope with the increase in foreign investors requiring FIRB approval. However, the ATO has noted that it will prioritise urgent applications and those with commercial deadlines.
In the context of residential property sales, as foreign investors were already required to apply for FIRB approval, regardless of the value of the property, the removal of the monetary threshold will not impose additional requirements on these purchasers. Additionally, the ATO has confirmed that they do not expect there to be any change to FIRB application processing times for residential property purchases.
As such, sellers of residential property should be aware of, but not alarmed by, these changes which have been announced but are yet to be ratified by legislation. Shand Taylor Lawyers will continue to monitor changes to the FIRB approval process, and if you are concerned about the impact these changes may have on you, do not hesitate to contact us for advice.
Matthew Shannon, Partner
(07) 3307 4506
Patrick Sherlock, Senior Associate
(07) 3307 4542