The article should be directed principally to foreign individuals purchasing Victorian residential or commercial property, while noting that separate rules may apply to companies, trusts, developers and agricultural investments.
1. Confirm whether you are a "foreign person"
The article should explain that citizenship, permanent residency, temporary residency and the proposed ownership structure can affect whether approval is required. Temporary residents and foreign-controlled companies or trusts may be foreign persons for FIRB purposes. Certain New Zealand citizens holding, or eligible for, a special category visa may be exempt for residential land acquisitions.
2. Identify the type of property
The checklist should distinguish between:
established residential dwellings;
new dwellings;
vacant residential land;
commercial land;
agricultural land; and
development sites.
This is critical because different approval requirements, thresholds and conditions apply.
3. Check whether the property can legally be acquired
From 1 April 2025 to 30 June 2029, foreign persons are generally prohibited from purchasing established dwellings in Australia unless a limited exception applies.
New dwellings, vacant residential land and acquisitions that genuinely increase housing supply may remain available, subject to approval and applicable conditions.
4. Obtain FIRB approval before signing an unconditional contract
For residential property, the application is made through the ATO's Online services for foreign investors. Approval should generally be obtained before acquiring the property.
Where approval has not yet been obtained, the contract should contain an appropriately drafted FIRB condition. The clause should address:
the application deadline;
payment of the application fee;
the purchaser's obligation to pursue the application diligently;
whether approval subject to conditions is acceptable;
the deadline for obtaining approval; and
termination and deposit repayment if approval is refused.
5. Budget for the application fee
The FIRB application fee depends on the property type and value. The statutory decision period does not begin until the correct fee has been paid. Fees are generally not simply refundable because the purchaser changes their mind.
The article should avoid reproducing an extensive fee table because fees are indexed and change over time. Linking clients to the current government fee schedule is safer.
6. Allow sufficient time
Although the statutory decision period is generally 30 days once a complete application and correct fee have been received, additional time may be required where further information is requested or the decision period is extended.
The contract's finance, due diligence, settlement and FIRB dates must therefore be coordinated carefully.
7. Check Victorian foreign purchaser duty
FIRB approval is separate from Victorian stamp duty. A foreign purchaser may also be liable for the Victorian foreign purchaser additional duty, depending on the purchaser's status and any available exemption.
This is an important distinction:
FIRB is a Commonwealth foreign-investment approval regime.
Foreign purchaser additional duty is a Victorian taxation issue.
Approval under one regime does not remove liability under the other.
8. Check ongoing land tax exposure
Foreign investors may also be affected by Victorian absentee owner surcharge rules. The ownership structure should be reviewed before the contract is signed, particularly where a company or trust will acquire the property.
9. Understand approval conditions
Approval may impose conditions, particularly for:
vacant land acquisitions;
redevelopment proposals;
construction deadlines;
occupation;
leasing;
disposal; and
reporting.
Failure to comply may expose the purchaser to penalties, disposal orders or other enforcement action.
10. New dwelling exemption certificates held by developers
Some property developers obtain a new or near-new dwelling exemption certificate for a particular development. This is sometimes informally described as "blanket FIRB approval". Where an exemption certificate applies to the relevant dwelling and the proposed purchaser, the foreign purchaser may not need to obtain separate FIRB approval before entering into the acquisition. Instead, the developer generally notifies the Australian Taxation Office of the sale on the purchaser's behalf.
Foreign purchasers should not assume that an exemption certificate applies merely because the property is new or is being sold off the plan.
Before signing the contract, the purchaser should obtain written confirmation from the developer that a current exemption certificate covers the particular dwelling, confirm any applicable conditions or purchaser eligibility requirements and obtain advice regarding any separate registration, taxation and reporting obligations.
11. Register the acquisition
Foreign persons must notify certain acquisitions and disposals through the Register of Foreign Ownership of Australian Assets. The register applies to relevant interests in Australian land and certain other assets.
12. Lodge annual vacancy fee returns where required
Foreign owners of residential dwellings may need to lodge an annual vacancy fee return while they own the property, even where no vacancy fee is ultimately payable.
The owner should retain evidence showing that the dwelling was occupied or genuinely available for rent for the required period.
13. Obtain advice before nominating or changing the purchaser
Changing from an individual purchaser to a company, trustee or related entity can affect:
FIRB approval;
application fees;
Victorian duty;
foreign purchaser additional duty;
land tax;
finance arrangements; and
contractual nomination rights.
A nomination should never be treated as a purely administrative change.
The key takeaway
Before signing a contract, a foreign investor should confirm:
whether the purchaser is a foreign person;
the correct purchaser entity;
whether the property is established, new, vacant, commercial or agricultural;
whether the acquisition is presently permitted;
whether FIRB approval or an exemption applies;
the applicable FIRB fee;
that the contract contains an adequate FIRB condition;
Victorian foreign purchaser duty exposure;
absentee owner land tax exposure;
financing and settlement timing;
registration and reporting obligations; and
any annual vacancy fee return requirements.
At KCT Legal, we assist clients with property transactions and provide tailored advice to help them understand their legal obligations and navigate the purchasing process with confidence. Whether you are considering an established property, a new dwelling or a development opportunity, obtaining legal advice early can help ensure the proposed acquisition is structured appropriately and that the necessary approvals and conditions are addressed before you sign a contract.
If you are considering purchasing property in Victoria as a foreign investor, contact KCT Legal to discuss your circumstances and how we can assist.
This article is provided for general information only and does not constitute legal advice. The information may not be appropriate for your particular circumstances. You should obtain specific legal advice before acting or relying on any information contained in this article.