The Treasurer has announced changes to Australia’s foreign investment review framework, effective from 10.30pm AEDT on Sunday 29 March 2020, relating to monetary thresholds and timeframes for reviewing applications. Details are available in our recent News article, including Q&A. Material on the FIRB website is being updated to capture these changes. In the meantime, all material on this website, including guidance notes, should be read in light of the Treasurer’s announcement.

Commercial real estate

Foreign persons may be required to notify and receive a no objections notification before acquiring an interest in commercial land in Australia. Different rules apply depending on whether the land is vacant or not, whether the proposed acquisition falls into the category of sensitive commercial land that is not vacant, and the value of the proposed acquisition.

Commercial land means land in Australia (including any building on the land) or the seabed of the offshore area, other than land:

  • used wholly and exclusively for a primary production business;
  • on which the number of dwellings that could reasonably be built is less than 10; or
  • on which there is at least one dwelling (except commercial residential premises).

Vacant commercial land

Commercial land is vacant if there is no substantive permanent building on the land that can be lawfully occupied by persons, goods or livestock.

Foreign persons generally need to notify before acquiring an interest in any vacant commercial land, regardless of the value of the proposed acquisition ($0 threshold). No objections notifications will normally be subject to conditions that the foreign person:

  • commences continuous construction of the proposed development on the land within five years of the date of approval; and
  • does not sell the land until construction is complete.

Developed commercial land

Foreign government investors are required to notify before acquiring any interest in developed commercial land, regardless of the value ($0 threshold) and their country of origin.

Foreign persons need to notify before acquiring an interest in developed commercial land only if the value of the interest is more than the relevant notification threshold. The general notification threshold for developed commercial land is $275 million unless the proposed acquisition is considered to be sensitive, in which case the threshold is $60 million.

If the foreign person is from an agreement investor country or region, the threshold is generally $1,192 million regardless of whether the land is considered sensitive.

Land on which the only dwellings are commercial residential premises is considered developed commercial land and includes:

  • a hotel, motel, inn, hostel or boarding house;
  • premises used to provide accommodation in connection with a school;
  • a marina with berths occupied by ships used as residences;
  • a caravan park or camping ground; or
  • any other premises similar to those outlined under the GST Act, other than premises used to provide accommodation to students in connection with an education institution that is not a school.

‘Commercial residential premises’ does not include retirement villages, aged care facilities and certain student accommodation.