What does FIRB approval mean, and what does it cover?

What the approval says

Treasury's guidance says the document is what people usually mean by "the approval". It must be in writing and specify:

• the action or actions it relates to
• the foreign person or persons it relates to
• the time limit for taking the action, generally 12 months, with a longer period possible if that is not contrary to the national interest
• that the Treasurer keeps a last resort power to review the action in exceptional circumstances

It is generally provided by email, and the Act requires it to be given within 10 days after the decision is made. Treasury's guidance says applications for land are considered title by title, so the notification relates to a specified property. The ATO's application page says the ATO sends the notification once approval is granted.

What an approval allows

Once a notification is in force and its conditions are met, the Treasurer generally cannot issue a prohibition or disposal order about that action. Treasury's guidance gives one exception: the last resort power under section 79A, which applies in exceptional circumstances and, where it is used to vary or revoke, only if reasonably necessary to reduce a national security risk. Separately, the Treasurer may revoke a notification where false or misleading information was given or a material fact left out.

An exemption certificate works differently. A residential land certificate lets a foreign person buy one new dwelling or one vacant title that is not yet identified, in the state or territory named, up to the price limit, and is generally valid for 12 months. Treasury's example is a buyer with a $2 million certificate who loses at several auctions, then buys one block for $1.5 million. The certificate is then used up and cannot buy a second block. Another example shows a bidder going to $1.3 million on a certificate capped at $1 million, which means that purchase had no approval.

What an approval does not do

• It is not a loan approval. A lender decides separately whether to lend. For lending to people living overseas, see non-resident home loans and the home loans guide.
• It does not remove state surcharges. Stamp duty and land tax surcharges are set by each state or territory. See the surcharges.
• It does not end your obligations. Treasury's guidance lists notice to the Register of Foreign Ownership generally within 30 days, an annual vacancy fee return where the home is empty, records kept for up to five years, and compliance with any conditions. See the register and vacancy fee pages.
• It does not deal with title or the contract. It is a decision under the foreign investment rules, nothing more. Whether the contract settles is a matter for the contract and a conveyancer.

How long an approval lasts

The time limit is stated in the notification and is generally 12 months. Treasury says that if the action is not completed within the time allowed, a new notification must generally be given. A foreign person can also apply to vary an approval, for example to change conditions or the period, and Treasury's fees guidance says a fee is payable for variation applications. The ATO's form lists simple variations for minor corrections and complex variations for substantial changes to conditions or validity periods. See how long approval takes for the decision period and conditions after you buy for what follows.

When a buyer has no approval of their own

A developer can hold a New (or Near-New) Dwelling Exemption Certificate for a development. Where the certificate covers a dwelling, the foreign buyer generally does not need their own approval, though they should check the certificate covers their purchase. The certificate generally covers up to $3 million of dwellings per foreign buyer in one development. Treasury's example: a buyer who has bought a $2 million dwelling and then wants another at $1.3 million would reach $2,000,000 + $1,300,000 = $3,300,000, which is $300,000 over the limit, so they need separate approval and fee for the second. See developer exemption certificates.

Frequently asked questions

firbapproval.com.au is an independent guide. It is not affiliated with, endorsed by or connected to the Foreign Investment Review Board, the Australian Treasury or the Australian Taxation Office. We do not lodge or process applications. Applications are made to the ATO. General information only, not legal, tax, migration or financial advice.