MM COVID-19 UPDATE: CHANGES TO FIRB APPLICATIONS

MM COVID-19 UPDATE: CHANGES TO FIRB APPLICATIONS


Temporary Changes to Australia’s Foreign Investment Framework

Temporary changes to Australia’s Foreign Investment Framework have been enacted by the Federal Government, effective from 29 March 2020, that might have an impact on foreign investment in the Australian property market.

The most concerning change for foreign investors might be the extended review timeframe for FIRB application.

It is said that the processing time may be up to six months from the date of your application fee payment. This is due to the recent change that the threshold amount for screening foreign investment is now $0. This means that under Australia’s foreign investment framework, ALL foreign investments will require approval regardless of value or the nature of the foreign investor.

Therefore, we can expect the volume of applications will increase and the previous decision period of four to six weeks will be extended to up to 6 months. However, the Chair of the Foreign Investment Review Board has advised that the great majority of applications will be processed much faster than that.

For residential development projects, many developers have already obtained an FIRB exemption certificate to sell to foreign purchasers before their project commences so that no separate application will be required for most of these purchases.

Recent News on Stamp Duty

States are now facing growing calls from the real estate industry to reduce stamp duty costs as a measure to boost the housing market. Whilst this would be great news to future investors and home buyers, there has been no indication that the  State Government are considering a reduction to stamp duty any time soon.

What we could expect is that the property market will soon bounce back along with various stimulus packages coming into effect to kick-start the economy after the COVID 19 lockdown.

Madison Marcus is closely monitoring all developments relating to the COVID-19 Crisis and how they can affect our clients. You can keep up to date with the advice from our experts in relation to legal  and business issues that have arisen so far by subscribing to our E-Alerts here.

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