By Ron Cohen

10 June 2015

During the course of this year, several reforms have been proposed by the Federal Government to improve and strengthen Australia’s foreign investment framework in order to ensure that future investment benefits our national interests.

There will also be stronger enforcement of compliance with foreign investment requirements and harsher penalties for non-compliance.

These proposed reforms include:

  • Foreign residential real estate to be administered by the Australian Taxation Office. The ATO will be in charge of compliance and enforcement which will include data matching systems.
  • There will be harsher penalties for non-compliance (increased from $85,000 to $127,500 for individuals and $637,500 for companies) for those who have been found to breach Australia’s foreign investment rules.
  • Application fees will be introduced based on a “user pays” system:
  • a) for residential real estate the fee is dependant upon the value of the property and are anticipated to start from $5,000 for properties less than $1 million and then on an increasing scale;
  • b) fees will also apply for commercial and agricultural real estate; and
  • The Australian Treasurer announced that the threshold for FIRB review of purchases of agricultural land by foreign persons will be reduced from $252 million to $15 million from 1 March 2015.
  • Foreign investors must seek prior approval for a proposed acquisition of an interest in rural land where the cumulative value of rural land that the foreign person or any associates already holds exceeds, or immediately following the proposed acquisition is likely to exceed, $15 million.

The new rule provides that an interest in rural land includes a direct interest, or an interest indirectly held, for example, where a foreign person acquires a substantial interest in a company in which more than 50% of the assets are made up of rural land.

The application of this new threshold will depend on the nationality of the investor. Australia’s free trade agreements have also increased screening thresholds. The effect of this has meant that the new $15 million cumulative threshold for agricultural land will not apply to investors from US, NZ and Chile ($1,094 million threshold applies) and Thailand and Singapore ($50 million threshold applies).

Related Articles

View All
Australia-Israel Legal Advice / Charities & Not-for-Profit / Technology and Start Ups

TLFC – Award Finalist for Law Firm of the Year (Medium Category)

Tisher Liner FC are proud to be nominated as an award finalist in the 14th annual Victorian Legal Awards Medium Law...
Read More
Charities & Not-for-Profit / Business Law / Charities & Not-For-Profits

Tax Effective Giving – Charitable Distributions Through Discretionary and Charitable Trusts

With a discretionary trust, the trustee determines which of the beneficiaries will receive trust income and the timing...
Read More
Business Law / Commercial Contracts & Agreements / Intellectual Property

It Won’t Happen To Us! We Know Each Other – We Don’t Need an Agreement

The material considerations relevant to your interest, whether it be a property development, joint venture,...
Read More
Business Law / Intellectual Property

Are you Aware of the New Cyber Security Legislation?

As a result, the Australian government has now introduced new legislation which comes into effect on 22 February 2018...
Read More
Business Law / Commercial Contracts & Agreements

Have you Executed and Dated the Documents Correctly?

You need to ask: Who has executed the documents How do I know that the right person has done this   Also with the...
Read More
Adverse Possession / Business Law / Compulsory Acquisition

Property Law Symposium – Wednesday 07 March

Tisher Liner FC Law Principal and Accredited Business Law Specialist, Phillip Leaman, will be sharing his expertise on...
Read More
Business Law / Commercial Contracts & Agreements / Litigation & Dispute Resolution

Corporate Divorce – The Importance of Prompt Damage Control

When good companies fail due to deteriorating business relationships, there is often a cast of familiar players: 1 The...
Read More
Business Law / Commercial Contracts & Agreements

Important Contractual Clauses: Things You Must Consider Carefully

The following are some items to consider when you review a contract: Term: Outlines the duration of the contract It’s...
Read More
Business Law

Tips for Ensuring Agreements Don’t Fail

If you are entering into an agreement, considering the following tips to make sure you are protecting yourself and/or...
Read More
Business Law

Tips for Ensuring Agreements Don’t Fail

If you are entering into an agreement, considering the following tips to make sure you are protecting yourself and/or...
Read More
Business Law / Employment Law

Employee Departures | How to Protect your Business

A large part of the parameters of these are already set down in whatever employment contract your employee has been...
Read More
Business Law

Unfair Contracts

Does the regime apply to your contract You need to consider: Whether your entity meets the definition of a ‘small...
Read More