FIRB Approval for Australian Property: Who Needs It

FIRB approval is required before you exchange contracts on eligible Australian property — not after, not at settlement. Signing a contract without it where approval is required is not an administrative oversight that can be corrected. It is a breach of the Foreign Acquisitions and Takeovers Act 1975, and the consequences include forced divestiture of the property and civil penalties.

Understanding who needs FIRB approval, what it costs, and how the process works is essential before approaching any property purchase as a non-resident or temporary resident.

Who Needs FIRB Approval

The requirement is not limited to foreign nationals. The following categories of purchaser require FIRB approval for eligible Australian residential property:

Foreign nationals: Citizens of countries other than Australia who do not hold Australian permanent residency. FIRB approval is required for all eligible residential property purchases regardless of the purchase price.

Temporary residents: Individuals in Australia on temporary visas — work visas, student visas, partner visas pending permanency — require FIRB approval for most residential property purchases. Temporary residents may be able to purchase an established dwelling for personal use while residing in Australia, subject to conditions. They generally cannot purchase established dwellings for investment.

Some permanent residents living overseas: Australian permanent residents who are ordinarily resident outside Australia may require FIRB approval depending on the property type and their specific circumstances. This category is frequently misunderstood. If you hold permanent residency but live overseas, confirm your obligations with an Australian solicitor before signing anything.

Australian citizens do not require FIRB approval regardless of where they live or where their income is earned.

Eligibility criteria and thresholds are subject to change — confirm current rules at firb.gov.au before proceeding.

Current FIRB Application Fees

FIRB fees are non-refundable and paid to the ATO at application. They are indexed periodically. The following are indicative ranges — confirm exact current fees at firb.gov.au before applying.

On a $900,000 new apartment purchase, the FIRB fee is approximately $14,100 — non-refundable, payable at application regardless of outcome. This cost must be budgeted alongside stamp duty, legal fees, and the deposit.

Eligibility criteria and fees are subject to change — confirm current rules with the relevant authority.

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The Application Process and Timeline

FIRB applications are lodged through the ATO's foreign investment portal at firb.gov.au. The process:

1. Create an account on the ATO foreign investment portal

2. Complete the application form — property details, applicant details, intended use

3. Pay the non-refundable application fee

4. Submit and wait for a decision

The standard processing time is 30 days from receipt of a complete application. The ATO can extend the review period — typically to 90 days — for applications requiring more detailed examination. In practice, straightforward applications for new residential dwellings are often processed within the standard window.

For off-the-plan purchases, many developers expect contract exchange within 14 days of reservation. Ensure the developer understands that FIRB approval is required and negotiate a contract exchange timeline that accommodates the 30-day processing window. A standard contract should be made conditional on FIRB approval being obtained — your solicitor should include this condition.

What Happens Without FIRB Approval

Purchasing without required FIRB approval is a serious breach with significant consequences:

• The ATO can order the forced divestiture of the property — you may be required to sell
• Civil penalties apply — up to three times the greater of the transaction value or the capital gain
• Criminal penalties are available in the most serious cases
• The transaction may be unenforceable

The ATO actively monitors foreign property purchases through data matching with state revenue offices and the land titles system. Compliance is not optional and enforcement is not theoretical.

The New Dwelling Requirement for Foreign Nationals

Foreign nationals are restricted to new residential dwellings — they cannot purchase established homes for investment purposes. What counts as a new dwelling:

• Newly constructed apartments, houses, or townhouses bought from a developer
• Off-the-plan residential properties not yet constructed
• Newly built properties occupied for less than 12 months before first sale to an investor
• Duplex constructed through knock-down rebuild replacing a single dwelling with multiple dwellings

Not eligible:

• Established residential dwellings (second-hand homes, previously occupied properties)
• Renovations or extensions to existing properties
• Knock-down rebuilds that replace one dwelling with one new dwelling
• Granny flats added to established properties

The Step That Cannot Be Skipped

Have an Australian solicitor with foreign investment experience review your situation before you take any action. This includes before you attend inspections, before you register interest with a developer, and certainly before you sign anything.

The solicitor confirms whether FIRB approval is required for your specific circumstances, ensures any contract is conditional on FIRB approval, and manages the application process alongside your purchase timeline.

The FIRB fee is a fixed cost of the transaction. The cost of proceeding without approval where it is required is not fixed — it is open-ended and potentially catastrophic.

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Credit Representative 508009 is authorised under Australian Credit Licence 538623 (Key Choice Group Pty Ltd, ABN 27 106 387 786). The information in this article is general in nature and does not constitute personal financial advice. Your individual circumstances, financial objectives, and needs have not been considered. Before acting on this information, consider whether it is appropriate for your situation and seek independent financial, legal, or credit advice if required.