At a glance:
- Foreigners are allowed to purchase commercial property in Australia, but they must comply with strict laws and seek FIRB approval.
- The approval process involves eligibility checks, document submission, and fees, with a decision typically within 30 days.
- Foreign investors must meet tax obligations, including higher stamp duty, and adhere to legal and zoning regulations.
- Foreigners cannot purchase established dwellings for two years, but commercial properties remain available for investment.
- Popular commercial property types for foreign investors include office buildings, retail spaces, hotels, and industrial facilities.
Australia’s commercial property market is brimming with opportunity. But if you’re a foreign investor, you might be wondering: “Is it even possible for me to buy commercial property in Australia?”
Well, the short answer is yes. But before you get too excited, there’s a catch. Australia has specific laws and regulations that you need to understand before investing in commercial property, such as government approvals, tax considerations, restrictions, and many more.
So, in this guide, we will explore everything you need to know, from FIRB regulations and restrictions to expert tips.
Can foreigners buy commercial property in Australia?
Yes, foreigners can purchase commercial property in Australia, but they must comply with specific rules and regulations set by the Australian Government. In fact, foreigners from Free Trade Agreement (FTA) partners can enjoy extra benefits like higher monetary acquisition thresholds.
As a foreigner, you can invest in various types of commercial real estate, such as:
- Developed Commercial Land like retail spaces, industrial facilities, office buildings, hotels and tourism-related properties
- Vacant Commercial Land, which may require development approvals
- Sensitive Developed Commercial Land, which may be subject to additional restrictions
- Mining and Production Tenements, which involve resource exploration and extraction.
What do foreigners need to purchase commercial property in Australia?
If you have plans to purchase commercial real estate in Australia, careful planning is important, as it involves several steps, starting from the FIRB’s approval to legal compliance.
FIRB Approval
Firstly, the Australian Government requires foreigners to seek approval from the Foreign Investment Review Board (FIRB). FIRB reviews the foreign investment proposal under The Foreign Acquisition and Takeovers Act 1975, and notifies the Treasurer, who has the authority to approve or reject your application.
Here’s a quick review of what the FIRB application process looks like:
- Check your eligibility You must be categorized as a “foreigner” under Australian law to do this.
- Gather and submit all the required documents as requested through the FIRB portal.
- Pay the application fee, which varies from AUS$1000 to AUS$1.1 million, depending on the value of your investment.
- Wait for a decision, which can take up to 30 days.
Note: New Zealand residents, Australian citizens, and Australian permanent visa holders do not need to apply for the FIRB Approval to invest in commercial property.
Register and Meet Tax Obligations
Say you got the approval for your real estate investment in commercial property from the FIRB. Now, the next step is to register your interest on the Register of Foreign Ownership of Australian Assets. It ensures your property investment is recorded with Australian regulations.
After that, you must fulfil the tax obligations, which could differ from state to state. Usually, the foreign citizen stamp duty is higher than that for the Australian residents. To avoid any surprises, make sure to review all the tax laws in the state where you’re purchasing property.
Legal and Financial Compliance
As a foreign investor in Australia, you need to strictly adhere to all the local zoning laws, environmental regulations, and building codes. Since these regulations can be complex, it’s a good idea to reach out to legal and financial advisors, who are experts in foreign investment.
If you fail to comply with these investment rules and regulations, you might need to face severe penalties, such as hefty fines or up to ten years of imprisonment in Australia. To understand your responsibilities, visit the official foreign investment website.
Restrictions on Commercial property purchases for foreign investors
The Australian Government has announced the ban on the purchase of established dwellings for two years, effective from 1 April 2025. This ban applies to all foreigners, temporary residents, and foreign-owned companies. However, foreign investors can still engage in commercial property investments, subject to existing regulations and approval processes under Australian law.
What types of commercial properties are most popular among foreign investors in Australia?
Foreign investors are particularly drawn to commercial properties like office buildings, retail spaces, hotel and hospitality, and industrial facilities as these properties offer strong demand and stable returns.
In 2024, foreign market share in office buildings reached A$2.7 billion, while industrial investment increased to A$3 billion. Usually, major city areas like Sydney, Brisbane, Newcastle, Perth, etc, are the top hotspots for foreign investment due to their strong economic activity. However, the suburbs like South Melbourne, Collingwood, and Richmond also offer good opportunities for growth.
Things to Consider Before Investing in Australia’s Property as a Foreigner
Before making an investment, here are some of the things you can consider:
- Do comprehensive research on the various factors that affect the value of Australian property, such as property condition, location, demand, potential capital gain, etc.
- Choosing strategic locations with high foot traffic for investment can potentially yield stable returns. You can visit top property listings to check for availability and compare before making a purchase.
- Always review the property’s condition, its performance in the market, and the terms of any commercial leases, and ensure your budget can accommodate all costs involved.
- Familiarize yourself with Australian foreign investment laws like the Foreign Acquisitions and Takeovers Act 1975 and Foreign Acquisitions and Takeovers Fees Imposition Act 2015 to avoid penalties.
Can you get a mortgage in Australia as a foreigner?
Yes, as a foreigner, you can obtain a mortgage in Australia. However, the process to obtain it is stricter and more complex in comparison to the Australian residents. You must meet FIRB approval requirements, pass mortgage eligibility checks, provide extensive documentation, and sometimes even a larger deposit than what is typically required for residents.
