investing in Melbourne property
Foreign investment in Melbourne property (and
Australian property in general) is strictly controlled. If you are a foreigner* (i.e. you are
not an Australian citizen and do not have a permanent resident visa for Australia), there are
limitations placed on the type of property you can purchase and your property purchase
needs to be approved by the Foreign Investment Review Board
Effective from 18 December 2008 policy changes**
for foreigners acquiring Melbourne property are as follows:
purchasing second hand dwellings
The definition of ‘temporary resident’ includes all foreign
persons living in Australia on a valid visa, irrespective of the expiry date of that visa. This
includes people on bridging visas pending the outcome of a substantive visa application (eg if they
have applied for permanent residency) but, for example, does not include short-term visitors such
as tourists, business people and those here for a medical procedure.
Foreign students resident in Australia are no longer subject to a
$300,000 limit on the value of an established dwelling purchased as their principal place of
Vacant residential land
Acquisitions by foreign-owned companies, trust
estates and non-resident foreign persons of single blocks of vacant residential land are required
to build a dwelling within a period of 24 months (previously within 12 months and
development expenditure of at least 50 per cent of land cost).
The conditions previously applied to acquisitions
by temporary residents of single blocks of vacant residential land no longer apply (such
acquisitions will be exempt after the Regulations are amended in early 2009).
‘Single blocks’ of vacant land generally refers to
a block of land on which only a single dwelling could be constructed. This does not include large
tracts of land (eg for the purpose of subdivision) or multiple adjacent single blocks (eg to
develop a multi-dwelling apartment complex) – additional development conditions may apply to such
The existing requirement that only 50 per cent of
new dwellings can be sold to foreign persons on an ‘off the plan’ basis has been removed provided
developers market locally as well as overseas. Vendors are no longer required to have concurrently
developed a similar dwelling in order to be able to sell a new stand-alone dwelling to a foreign
person. This will be reviewed after two years.
A ‘new dwelling’ is currently defined as having
never been occupied or sold; this now includes dwellings that have not been sold but that have been
rented out for no more than 12 months.
Foreign companies purchasing second hand dwellings
Foreign-owned companies can now purchase
established dwellings for the use of their Australian based staff provided that they sell or rent
the dwelling if it is expected to remain vacant for more than 6 months. There is no limit to the
number of established dwellings which can be purchased, where required for employee
Redevelopment of second hand dwellings
A proposed redevelopment must increase the number
of dwellings and no rental income can be obtained from the existing dwelling prior to demolition.
Such redevelopments are required to demolish the existing dwelling and commence construction of the
new dwellings within 24 months in line with vacant land (previously 12 months), and
development expenditure must be at least 50 per cent of the purchase price of the
To find out what options
are available to you tell us more about your Melbourne property-related situation via
the Ask a
Question form. We can also assist you with obtaining your FIRB
approval by preparing and lodging your FIRB application.