Foreign Investors must register their interests in Australian land

Australia’s thriving real estate market attracts investors both nationally and internationally. The Australian government has recently imposed strict regulations under the Foreign Acquisitions and Takeovers Act 1975 (Cth) to maintain the integrity and security of its property market.

From 1 July 2023, all foreign buyers must register their interest in Australian residential land on the Register of Foreign Ownership of Australian Assets.

This is in addition to, and does not replace, any requirement for Foreign Investment Review Board (FIRB) approval.

Residential land (assets) to which this may apply include:
• vacant land;
• new, near new or established houses, units and apartments;
• a legal interest as lessee in a lease if the term is likely to exceed five years.

Who are Foreign Investors?
These changes only apply to a ‘foreign person.’ This can be a confusing notion, but broadly refers to any individual who is not an Australian citizen or permanent resident of Australia. It also includes a corporation in which a foreign person(s) holds at least a 20% interest, as well as trustees of a trust in which a foreign person(s) hold at least 20% of the beneficial interest in the income or property of the trust.

What this means for Foreign Investors
The new reporting obligations will require a foreign person to give notice (a “register notice”) to the Registrar of their acquisition or interest in Australian land. This must be completed within 30 days of the relevant ‘registrable event day’ which for a property purchase means the date of settlement.

The registration of residential assets is a free process which must be completed by the foreign person or their authorised representative. It is required regardless of the value of the asset and must be completed via the ATO's 'Online services for foreign investors' functions on the ATO website ato.gov.au/General/Online-services/Foreign-investors/Online-services-for-foreign-investors.

Significantly, the updated laws also impose an ongoing requirement on foreign persons to disclose if their situation changes at any point in the future – this includes both if their personal details change or if the asset details change. Understanding these new reporting requirements is crucial, as non -compliance with the obligations may result in infringement notices or costly civil penalties.

Aaron Gardner

Legal Advisor

Aaron, a legal advisor at Lawlab, obtained his law degree in Newcastle. He specialises in property law, with a particular focus on residential conveyancing. Prior to Aarons career in Law, he worked in the hospitality industry in operations management which equipped him well with many transferable skills. Aaron is all about live sport and exploring what Melbourne has to offer, from restaurants and laneway bars to the great outdoors.