Andrew from Vista Financial Posted January 20, 2016 Share Posted January 20, 2016 A recent change to Foreign Investment Review Board (FIRB) policy means that temporary residents now need to pay a fee when applying for FIRB approval and of course it is typically a condition that a temporary resident obtains FIRB approval before purchasing a home. The applications fees are as follows: Fees An application for approval to purchase residential real estate will not be considered until the relevant application fee has been paid in full. [TABLE=class: cms_table_table cms_table_table-bordered] [TR] [TH]Action[/TH] [TH]Fee Payable[/TH] [/TR] [TR] [TD]Acquiring an interest in residential land if the price of the acquisition is $1 million or less[/TD] [TD]$5,000[/TD] [/TR] [TR] [TD]Acquiring an interest in residential land if the price of the acquisition is more than $1 million and less than $2 million[/TD] [TD]$10,000[/TD] [/TR] [TR] [TD]Acquiring an interest in residential land if the price of the acquisition is between $2 million and less than $3 million[/TD] [TD]$20,000[/TD] [/TR] [TR] [TD]For each further $1 million increment in value[/TD] [TD]$10,000 per $1 million[/TD] [/TR] [TR] [TD]Applying for an exemption certificate to acquire one established dwelling[/TD] [TD]Same fee structure as an interest in residential land detailed above[/TD] [/TR] [/TABLE] Initially when I saw this mentioned I thought that this was just aimed at foreign investors and thought that those who are living and working in Australia would get some form of exemption however following several phone calls to them directly I have been told categorically that this fee also applies in this situation (there can be exemptions for some in certain situations ie spouse a Citizen etc). See more: https://firb.gov.au/resources/guidance/gn02/ Quote Link to comment Share on other sites More sharing options...
northshorepom Posted January 20, 2016 Share Posted January 20, 2016 (edited) One of my frustrations with this country is the way legislators produce new rules/regs/laws in a very short space of time, in reaction to media hot buttons and beat-ups, without any real thought as to the likely consequences. or any serious consultation. Laws are rushed in on a whim This legislation was brought in because of media/talkback radio whining about "Chinese investors" driving up the price of housing, esp in Sydney and Melbourne, and supposedly pricing locals out of the market. Despite numerous studies by both government and financial industry bodies finding that the impact of foreign investment purchasing was a small fraction of the heat in the market over the past 18 months (ironically speculative demand from local investors was a much greater contributor). So, media moan, government jerks the knee, people go away happy. Well at least those furriners will have to pay their pound of flesh now Except they probably won't. The realities of buying in those two markets are that most property goes to auction, or there is an auction campaign and the house is sold privately during that campaign. In both cases, buyers have to be able to move extremely fast; at auction you are exchanging contracts on the spot, if you buy prior and there's competition for the house then it's first who can exchange who will generally get the house. In order to exchange, a foreigner *technically* needs to have FIRB approval, but there is no obligation on the agent, vendor, or conveyancers to actually check this. Buyer just has to sign to say he has it. It takes a few days to get FIRB approval. I know this because I bought a house on a 457 and needed to have the approval myself to do so. Every auction I went to with the intention to buy (I think there were 4), I got the approval beforehand. After a while I got sick of the auction charade, and only chased houses where the owners were willing to sell prior. I agreed prices on 2 of those, but whilst waiting for the FIRB approval to come though, someone else came in and bought instead as they could exchange. Then I wised up, and every time we viewed a house that we might be interested in, we applied for the approval, just in case; I found out you were quite OK to have a fistful of live approvals. If we hadn't done that, we wouldn't have been able to buy the house we were in now Every one of these houses was over $1m, we probably got 10 FIRB approvals through the whole process. So under the new rules we would have had to cough up $100K for nothing It's just not going to happen, is it? It's obvious what is going to happen: foreigners are just going to say they've got approval when they haven't, so I confidently expect MORE houses will be bought without approval. The opposite of what the government says it is trying to achieve. And all to solve what? It's not going to stop foreigners buying. It's not going to do anything much to ameliorate hot markets (because foreign demand is a small fraction of that). Edited January 20, 2016 by northshorepom Quote Link to comment Share on other sites More sharing options...
Guest The Pom Queen Posted January 20, 2016 Share Posted January 20, 2016 So is the fee refundable if they are unsuccessful? Quote Link to comment Share on other sites More sharing options...
northshorepom Posted January 20, 2016 Share Posted January 20, 2016 No Quote Link to comment Share on other sites More sharing options...
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