On Saturday 2 May 2015 Prime Minister Tony Abbott and Treasurer Joe Hockey made a joint announcement confirming that a raft of changes to the foreign investments rules will be introduced between now and 1 December 2015. Following on from the recent consultation process, this announcement reinforces the Federal Government’s continued focus on tightening the foreign investment rules, with a particular emphasis on foreign investment in the residential and agricultural sectors. (1)
Under the proposed new rules, foreign investors are far more likely to require prior approval from the Foreign Investment Review Board (FIRB) before being allowed to buy Australian farms. Foreign investors include offshore entities and individuals as well as local companies with foreign shareholdings above the relevant thresholds (i.e 15% individually or 40% cumulatively). FIRB will only approve a farm acquisition by a foreign investor if it is not contrary to the Australian national interest. (2)
When selling a property the you will now need to enquire as to your potential clients status for purchasing certain property types. The FIRB website has a great FAQ to assist with understanding who needs to apply for the right to buy.