The Australian government updated its foreign investment policy in May 2024 to prioritise speed for certain types of acquisitions. Our FIRB application services help investors identify where their proposed purchase sits within this new risk-based system. Under the Foreign Acquisitions and Takeovers Act 1975, the Treasurer has the power to block investments that are contrary to the national interest. The 2024 reforms do not change the law, but they do change how the Treasury Department processes applications.
Investors now face different levels of scrutiny based on who they are, what they are buying, and how the deal is organised. Low-risk applications are fast-tracked, while high-risk applications undergo much longer reviews. For overseas buyers, temporary residents, and foreign corporations, knowing these categories helps in setting realistic timelines for settlement.
The 2024 Shift to a Risk-Based FIRB Regime
The Australian Treasury now uses a risk-based approach to allocate its resources. This means the government spends less time on simple, non-sensitive applications and more time on complex or sensitive ones. This change followed an evaluation of the 2021 foreign investment reforms which showed that a one-size-fits-all screening process was causing unnecessary delays for many buyers.
The Foreign Investment Reform (Protecting Australia's National Security) Act 2020 also introduced national security tests that remain a priority for the government. If your investment falls into a national security category, it will never be considered low-risk. Most residential property purchases by individuals do not trigger these national security concerns, but commercial acquisitions often do.
Low-Risk Profiles: Faster Paths for FIRB Application Services
A low-risk investment typically involves a known investor buying a non-sensitive asset through a simple structure. To qualify for faster processing, an application generally needs to meet three specific criteria: a clean investor profile, a non-sensitive target, and a clear transaction structure.
Investor Profile
The government looks for investors who have a history of foreign investment compliance in Australia. If you have previously owned property in Australia and followed all FIRB conditions, you are viewed more favourably. Passive investors who do not seek control over an entity or asset also fall into this category. If a low-risk investor joins a consortium with a high-risk or unknown partner, the entire application loses its low-risk status.
Target of Investment
Certain sectors are naturally considered safer for the national interest. Residential real estate, new housing developments, and commercial office buildings are usually classified as low-risk targets. Manufacturing and professional services businesses also fall into this category. Because these sectors do not involve critical infrastructure or sensitive data, the government is comfortable approving them more quickly.
Uncomplicated Structures
The structure of the purchase must be transparent. If an individual is buying a home in their own name, the structure is clear. If a foreign corporation is buying through a series of trusts and subsidiaries, the government must spend more time identifying the ultimate beneficial owner. Simple structures lead to faster outcomes. We provide foreign investor legal advice to help clients present their ownership structures clearly to the Treasury.
High-Risk Indicators and Increased Scrutiny
High-risk investments are those that could impact Australia's national security, competition, or tax revenue. These applications are subject to intense screening and often involve official FIRB reports from multiple government agencies, including the Australian Taxation Office and security intelligence organisations.
Sensitive sectors include critical minerals, telecommunications, and energy infrastructure. Any investment that provides access to sensitive personal data of Australian citizens is also high-risk. Also, the proximity of a property to a government facility or military base can trigger high-risk status. This often surprises residential buyers who find that their desired apartment or land is located near a restricted area.
The government is also looking closer at competition. If a foreign investor already holds a large market share in a specific Australian industry, a new acquisition will be scrutinised to ensure it does not give the investor too much power over pricing or supply. This is particularly relevant for large-scale commercial property acquisitions and agricultural land purchases.
Foreign Investment Compliance for Residential Property
Most individual buyers are focused on the residential sector. While residential property is generally low-risk, there are strict rules about what you can buy. Temporary residents, such as those on 482 or 491 visas, can usually buy one established home to live in, provided they sell it when they leave Australia. Foreign non-residents are generally restricted to buying new dwellings or vacant land for development.
There are also specific dwelling purchase restrictions coming into effect from April 2025 that will limit certain foreign purchases further. Staying compliant means following these rules exactly. For example, a foreign person cannot buy an established house to use as a rental property. They must build a new home or purchase a newly constructed one that has never been occupied.
Developers selling off-the-plan units often apply for blanket exemption certificates. This allows them to sell to foreign buyers without each buyer needing an individual FIRB approval. If you are buying in a large project, check if the developer has this certificate as it can save you time and money on application fees.
Commercial and Agricultural Land Thresholds
For commercial and agricultural investments, the risk level often depends on the value of the deal. The government sets monetary thresholds that determine if an application is even required. These thresholds are indexed on 1 January each year. Following the mandatory January 1, 2026, indexation, the current threshold for non-sensitive commercial land for most investors has increased and typically ranges between $340 million and $350 million depending on the final CPI adjustment, but this drops significantly if the land is considered "sensitive" (such as land used for mines or telecommunications).
Agricultural land has a much lower cumulative threshold of $15 million for most investors. The government tracks these investments through the Register of Foreign Ownership of Agricultural Land. Compliance in this sector is strict, and the penalties for failing to register an interest are severe. For those looking at larger developments, build-to-rent projects offer specific pathways that may bypass some of the standard restrictions on established dwellings.
Application Fees and Timelines
FIRB fees are a major consideration for any investor. Fees for residential property are based on the purchase price and increase in tiers. For a property valued at $1 million or less, the current fee reflects the July 1, 2025, indexation and is approximately $14,700. If the price is higher, the fee rises accordingly. These fees must be paid before the Treasury begins its review.
Standard screening timeframes are usually 30 days for a decision plus 10 days for notification. However, the Treasury has the right to extend this by another 90 days if the case is complex. Under the new risk-based policy, low-risk applications are being processed much faster than the 30-day statutory period, sometimes in as little as two weeks. High-risk applications should expect the full 30 days or longer.
Maintaining Compliance After Approval
Approval is often granted with conditions. For a developer, the condition might be that construction must begin within 36 months. For a temporary resident, the condition is that the home must be their primary residence and sold when their visa expires. Failing to meet these conditions is a breach of the Foreign Acquisitions and Takeovers Act 1975.
The Australian government has increased its monitoring and enforcement activities. They now use data matching with other agencies to find investors who have not followed their approval conditions. Penalties include large fines and, in some cases, court-ordered divestment of the property. Working with a lawyer to ensure your foreign investment compliance is up to date is an effective way to protect your asset.
While we provide legal advice on FIRB, specific tax and immigration matters require consultation with qualified specialists. This information is general in nature and FIRB rules change frequently. Contact us for advice specific to your situation.
