Practical solutions to streamline foreign investment
The Property Council has chalked up another advocacy win, after the Foreign Investment Review Board refines its definitions and technical rules to reduce barriers to investment in Australian real estate.
From 1 July, the Foreign Investment Review Board (FIRB) has amended several provisions and technical rules, following changes flagged by Treasurer Scott Morrison in his May budget.
“Several provisions and technical rules were inadvertently undermining the effectiveness of the regime that applied to residential and commercial property transactions, and these have now been fixed,” says the Property Council’s executive director of International and Capital Markets, Belinda Ngo.
“The success of the Property Council’s advocacy was in large part due to the expertise and dedication of our members who were able to provide real world examples of the unintended consequences of government policy,” she says.
For example, the FIRB has refined the scope of its definition of ‘sensitive land’ for the purposes of its approval thresholds. This has been addressed by narrowing what is treated as sensitive land by, for example, removing ‘prescribed airspace’ which covers most commercial properties in the CBDs of Australia’s major cities.
Ngo says this issue was first raised with Treasury in April 2016 and “the change will ensure the FIRB thresholds apply as originally intended for commercial real estate investments”.
Other changes include exemption certificates for developers wanting to re-sell off‑the‑plan dwellings that failed to settle to foreign persons – without the new exemption certificate, these dwellings would be technically considered ‘established’ despite never having been lived in.
Meanwhile, treating aged care, retirement villages and student accommodation as commercial land under the screening thresholds will aide supply in these critical sectors, Ngo says.
“The changes reflect a commitment from both the FIRB and the Australian Government to support ongoing refinement of Australia’s foreign investment regime.
“These changes are evolutionary and the Property Council will continue to work with the Australian Government to remove barriers to investment in real estate.”