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Buying Residential Property in Queensland as a Foreign Acquirer
Additional requirements and duties are imposed on foreign persons/corporations when purchasing residential property in Queensland. Penalties will apply if a foreign acquirer fails to comply with these requirements.
Foreign Investment Review Board Approval
The Foreign Investment Review Board (FIRB) is responsible for the regulation of foreign investments within Australia. A foreign acquirer is generally required to obtain FIRB approval before they can acquire an interest in residential property. An application fee (the cost of which is determined by the value of the property intended to be purchased) will also be required to be paid as part of the FIRB approval process.
Foreign Acquirer
A purchaser may be a foreign acquirer for the purposes of FIRB approval if they fall into one of the following categories:
- A person who is not an Australian citizen or permanent resident.
- A trust where the trustee is a foreign entity.
- A corporation where a substantial interest is held by a:
- foreign person(s)
- foreign corporation
- foreign government
FIRB Approval Exemptions
The following categories of people are exempt from needing to obtain FIRB approval before acquiring an interest in residential property in Queensland:
- Australian citizens living abroad.
- New Zealand citizens who hold, or are eligible for, a special category visa.
- Holders of an Australian permanent residency visa.
- Joint tenants who are purchasing with their Australian citizen spouse, Australian permanent resident spouse or New Zealand citizen spouse.
- Individuals who are purchasing a new dwelling from a developer if the developer has pre-approval to sell to foreign persons.
Please note that although a person may be exempt from needing to obtain FIRB approval, it is still possible that they will be required to pay Additional Foreign Acquirer Duty (AFAD).
If you have not obtained FIRB approval prior to signing a contract for the purchase of residential property, it is important that you ensure that the contract has the necessary special condition making it subject to FIRB approval being obtained prior to settlement.
Additional Foreign Acquirer Duty
Additional Foreign Acquirer Duty (AFAD) is an extra duty which is payable by foreign acquirers when obtaining an interest in residential property in Queensland. AFAD is paid in addition to any transfer (stamp) duty already payable on the transaction and is currently charged at 7%.
AFAD will only apply to the portion of the property being acquired by the foreign acquirer and is calculated as follows:
[Value of AFAD land x Extent of the interest acquired by foreign persons] x 7%
For example, if a foreign person is purchasing a property as joint tenants with their spouse who is an Australian citizen or permanent resident, the AFAD payable will only be calculated based on the foreign person’s 50% interest in the property.
New Zealand Citizens
AFAD does not apply to New Zealand citizens who hold a special category visa when they enter into the transaction involving AFAD residential land.
| Example | Does AFAD apply? |
| A New Zealand citizen who resides in Australia and holds a special category visa enters into a transaction in respect of AFAD residential land. | No |
| A New Zealand citizen residing in New Zealand enters into a transaction in respect of AFAD residential land in Queensland. | AFAD will apply, because the person will not be the holder of a special category visa under the Migration Act. |
| A New Zealand citizen who is currently residing in New Zealand enters into Australia and seeks to obtain a special category visa so that AFAD will not apply. | AFAD will apply if evidence made available to the Commissioner of State Revenue indicates that the purpose of entry into Australia was to avoid paying AFAD by obtaining a special category visa. |
| A New Zealand permanent resident enters into a transaction in respect of AFAD residential land in Queensland. |
AFAD will apply, because a New Zealand permanent resident will not be the holder of a special category visa under the Migration Act and is instead a foreign person for the purposes of AFAD. |
Exemption for Retirement Visas
An exemption to AFAD may apply on principal places of residence purchased on or after 1 January 2023 for people who hold a specific foreign retiree visa.
The specified foreign retirees captured by this exemption include individuals (not an agent) who either:
- hold a retirement via (subclass 405 or 410); or
- applied for a parent via (subclass 103) or contributory parent visa (subclass 143) on or after 8 May 2018 and the application is pending, and the last substantive visa held before applying is a retirement visa (subclass 405 or 410).
If you are unsure about whether your personal circumstances will be impacted by FIRB Approval and/or AFAD, or should you require further advice regarding these matters, please do not hesitate to contact one of the solicitors in our property law team via the link below.