Friday, 27 September 2013

Coffs Harbour and Tamworth on Chinese investors' radars


Coffs Harbour and Tamworth on Chinese investors' radars

By Jennifer Duke
Thursday, 26 September 2013
While apartment builders have been targeting chinese buyers, house and land developers are also getting in on the action, with interest up in Coffs Harbour and Tamworth.

Andrew Taylor, CEO of the number one Chinese international property portal, Juwai.com, pointed to statistics showing that Chinese investor interest in Tamworth over August was up 177% over January 2013 figures.
In Coffs Harbour, it was up 133%.
These numbers are based on user activity on the websites page views, searches, search results and enquiries.
"Australia's Foreign Investor Review Board makes it clear that international investors who want to buy house and land packages can almost always get approval. The only condition is usually that they begin construction within a couple of years," said Taylor.
"Our experience with Chinese buyers tells us that some prefer new property, and the chance to design a house around their own lifestyle can be very attractive," he said.
"Some want to have a wok kitchen, which you can't find in most Aussie houses. A wok kitchen is a small room with a sink, stove and powerful exhaust fan just behind a door off the larger, Western-style kitchen."
Director and West Australia operations manager for Integrity New Homes, Glenn Leet, is offering this type of product in both areas.
Leet said that the company's goal is to increase enquiry from Chinese buyers by 25% within six months.
"What I learned from going to China is that house and land packages are of interest to Chinese buyers, especially those who will be living in Australia. Your best buyers are those who already have their visa or residency sorted out," he said.


      Thursday, 26 September 2013

      VIC- the Easiest Pre-Sale's in the Australia. The Victorian Government will buy almost every apartment in the Evo development


      Almost every buyer in freeway affected Evo to sell to government in circa $90m deal

      By Alistair Walsh
      Thursday, 26 September 2013
      The Victorian Government will buy almost every apartment in the Evo development in Parkville which will be surrounded by off-ramps from the East West Link.
      http://www.evoapartments.com.au


      Of the 158 off-the-plan investors in the building, a reported 156 have taken up Linking Melbourne Authority’s offer to buy their apartments before settlement.
      The remaining two will either sell with 90 days of settlement or keep the apartments and apply for compensation later.
      Those who accepted the plan now have to wait for the valuations of the apartments which are due by next Thursday.
      The LMA says the valuations will be unaffected by the impending East West Link construction.
      It is also in negotiations with the developer to buy the remaining 17 unsold apartments.
      The buyback will reportedly cost somewhere in the vicinity of $90 million.
      Buyers in the Pace Development Group had been demanding action from LMA after plans for the massive freeway development revealed the tower would literally be surrounded by off-ramps up to five-storeys high.
      evo-sept-26-one
      Earlier this month LMA offered buyers three compensatory options.

      Monday, 23 September 2013

      FIRB RULE foreigners may only acquire established dwellings for the purpose of redevelopment.So demolish what ever they buy and build.

      FIRB RULE foreigners may only acquire established dwellings for the purpose of redevelopment.So demolish what ever they buy and build.

      If you are from overseas and want to find out how this is possible email me.

      How do I thinkpropertyjason make this work for me ?

      I have to thank my years of education and action with the help of Knowledge Source that has given me this oportunity now to make this happen. 

      I plan to develop properties in areas that need more density.

      My buyer are overseas buyers who wants me to source them a good redevelopment property and develop that site for them to meet the rule. They want to buy something that adds at least 20-30% profit and keep or just rent out positive geared. 

      I am educated and have experience and the know how. I am a capable Project Manager with over 5 Developments underway.

      Some of these developments are bought with Chines overseas buyers and meet the FIRB. 

      We find the property for them which makes an excellent profit or excellent equity boost. 

      We find them the right development site with the best resale or revalue. I will be doing a JV with them as the worker and developing their property for them. They have to demolish the property which is fine because it is a high density designated area and they make more money from a redevelopment. 

      If this interests you too don't hold back. In the last five years I have educated myself through project after project and had Knowledge Source mentors the whole time. Contact Knowlegde Source, get educated. The future is possible. Its not money you need. You need eduction. 

      "The FIRB requires foreign buyers to demolish existing habitable dwellings and replace them with multiple dwellings as redevelopment does not include refurbishment of an existing dwelling. Read example below.

      Chinese family buy $1.4 million Sunnybank QLD home for student son but will have to demolish it.

      $1.4m student pad to be bulldozed
      The Sunnybank home which has been bought by a Chinese family for $1.4million for their student son. Source: Supplied
      A CHINESE family has paid $1.4 million for a Sunnybank home for their student son - but will have to demolish it.
      In an increasing market trend, Asian buyers are parting with millions of dollars to buy properties for their children studying in Australia.
      A Sunnybank home on a 1620sq m double block sold under the hammer for $1.4 million on August 31, with the Chinese bidders buying the property sight unseen for their 23-year-old son Kai Shen who studies in Australia.



      The $1.4 million Sunnybank home bought by a Chinese family for their student son



      The $1.4 million Sunnybank home bought by a Chinese family for their student son
      According to LJ Hooker Sunnybank Hills agent Owen Chen, the son's parents in China bid for 6 Selvage St over the phone.
      Mr Chen said five out of 10 Asian buyers bought homes for teen students studying overseas.
      "These parents are also preparing for the future and a time when they can retire to Australia and live in the same homes their children have moved out from," he said.


      As Kai Shen and his parents aren't Australian citizens and 6 Selvage St isn't a new home, they will need to demolish it and rebuild.
      Dave Platter of Juwai.com, which offers property listings, market analysis and property buying guides to Chinese-speaking consumers around the world, said these regulations ensured international buyers added to the housing stock in Australia, which benefited everyone.


      "The FIRB requires foreign buyers to demolish existing habitable dwellings and replace them with multiple dwellings as redevelopment does not include refurbishment of an existing dwelling," he said.
      Mr Platter said he was unsurprised by the impressive, sight unseen sale of 6 Selvage St.
      "Buying homes for teenagers studying in Australia is a big motivator for Asian buyers," Mr Platter said.
      "About 18 per cent or one fifth of such buyers buy overseas homes purely for education-based reasons.
      "This might seem unusual to Australians but for Asians, it's perfectly normal as education is very important to them.
      "China is also currently the largest source of international students in Australia with Chinese students making up 20 per cent of all international enrolments."
      Mr Chen said Mr Shen and his parents were not the only people keen to buy the two-level, four-bedroom home which included a patio, fireplace, bar and quiet, leafy surrounds.
      "There were 33 registered bidders at the auction and a crowd of more than 100 people attended the event," Mr Chen said.
      "Ninety-seven groups of people also inspected the home during the four-week marketing campaign.
      "One reason for the home's popularity was its very large block - there are not many left in this area of this size."
      Mr Shen, who is studying international business at Griffith University, has lived in Australia for seven years.
      "I went to high school on the Gold Coast then moved to Brisbane," he said.
      "I am the only one of my family here but my parents visit every year."
      Mr Chen said the home's vendors plan to return to Hong Kong to live.
      ###

      Sunday, 22 September 2013

      NSW You want a Boarding House in NSW. This is what you need to know.


      Boarding House Division

      New Boarding House requirement

      Boarding house operators will need to register with NSW Fair Trading by 30 June 2013 under the new Boarding Houses Act 2012.

      The Occupancy Principles set out in Schedule 1 of the Act will be enforceable from 1 October 2013.
      Further information is available on the Fair Trading website at: www.fairtrading.nsw.gov.au/ftw/Tenants_and_home_owners/Boarding_houses.page


      Boarding houses provide accommodation for a fee. Boarding house residents are, however, different from tenants as they do not have the control over the premises that a tenant has, and usually they do not have a right to occupy the whole of the premises.
      See www.fairtrading.nsw.gov.au/Tenants_and_home_owners/Boarding_houses.html for more details.

      What is a Boarding House? How are they different to Residential Tenancies

      Boarding Houses: Managed & Community Premises with non exclusive usage.
      Boarding houses provide managed accommodation with non-exclusive occupation of a premise to boarders/lodgers/residents. The legal responsibility of the owners of boarding houses, is to provide accommodation and living services which ensure the welfare of the whole property meeting statutory requirements.
      Residential Rental Properties: Individual self-managed, non community Premises with exclusive usage.
      Residential rental properties are a type of accommodation where the tenants have exclusive control over a designated area. The legal responsibility of the owner is to provide an exclusive private space to a tenant and meet statutory requirements.

      What are 'Boarding Houses'?

      'Boarding houses' are as varied as the management and the specific area and community they cater for. Occupants enter a managed premise and are part of a community where individuals have no exclusive control over any specific area.
      Although boarding houses cover less than 3% of the accommodation market, they meet the accommodation needs of a diverse groups of residents requiring low to moderate cost accommodation ranging from students, guest house residents, single people, older men, lodgers who seek onsite management services, contract workers, those who want a community, those requiring flexibility.
      It is a unique form of accommodation, usually managed by an owner and his/her family. Despite low returns, the hands-on nature of the management and the unique history of each accommodation premise, owners work towards maintaining this style of low cost to moderate cost boarding houses.

      Threats to Boarding House existence

      Today boarding houses are financially precarious with:
      • high insurance costs
      • increasing fire safety upgrades and fire compliance costs
      • council inspections
      • council requirements and environmental planning policies compliance
      • upgrades to meet modern standards
      • commercial water rates, garbage charges and electricity
      • management costs
      • competition with the unregulated 'share' accommodation or quasi boarding house providers who do not have expense or workload of the onerous financial and government controls in the areas of fire, health, council registration and statutory requirements that apply to boarding houses
      • positioned in generally high value locations with increasing pressures by developers to sell
      • rent control and length of stay conditions for those who apply for land tax exemption
      • low returns

      Why do residents chose to live in Boarding Houses?

      Boarding houses are different to residential tenancies. They are NOT individual accommodations within a block of units. They are managed premises where residents reside within one property. Living is often shared, with communal facilities, with people expecting the owner/manager to resolve problems and ensure the harmony of the community within the boarding house. The accommodation is furnished with residents expecting assistance when needed. For example elderly residents seek management to assist with changing a light bulb and such domestic needs. If there is a disagreement between residents, the Manager resolves it to keep peace and quiet.
      Residents chose to reside in their boarding house of choice. They can enter with a nominal deposit on a low to moderate weekly tariff. They have furnishings provided and some services such as cleaning common facilities. They enjoy their independence, yet have the benefits of management and community. They come and go as they please, without a lease commitment.
      Samples of types of 'boarding houses:
      • short term lodgings (such as Bondi Beach and Manly guesthouses)
      • student hostel (such as Unilodge)
      • lodgings houses catering for long term hospital outpatients (around St Vincent's hospital)
      • mixed resident long to short term accommodation in private hotels (inner city locations)
      • temporary contract workers on leave (in North Sydney and Kirrabilli)
      • guest houses and private hotels
      • licensed boarding houses (Licensed Residential Centre LRC) which operate under a 'support and care' based occupancy with rigorous government compliance regulations. *(See below)

      Why do Boarding House residents NOT go into residential tenancies?

      Residential tenancies mean:
      • 4 to 6 week bond
      • Rent in advance
      • Usually not furnished
      • Lease commitments
      • Responsibility for services such as water usage and electricity
      • Tenancy checks which may act as a barrier to gaining a rental premise
      • No management
      • No community
      • Boarding houses mean:-
      • Management
      • 1-3 week deposit
      • 1 week tariff in advance
      • Furniture & fittings
      • Flexible entry into accommodation
      • Flexibility of stay
      • House Rules
      • Management
      • Assistance
      • Good locations
      • Community
      When a new occupant enters a community, the onus is on the new occupant to live within that boarding house. The primary right is the community with the boarding house not the individual. For occupants who require exclusive residential accommodation, then there is the residential rental market available.

      Not-For-Profit (NFP) Boarding Houses

      NFP 'boarding houses' provide for a small marginal group within the boarding house communities. These NFP boarding houses are given financial benefits:
      • exemptions on commercial charges
      • substantial government subsidies
      NFP operators are not suitable for traditional boarders and lodgers who:
      • seek a unique accommodation service that meets their needs
      • want to operate freely and independently
      • do not want a 'care' organization as their accommodation provider

      Impact of legislation on Boarding Houses

      The impact of legislation on an already marginal accommodation business threatens the existence of boarding houses and will be detrimental to residents, as evidenced in Victoria. In Victoria where legislation has been introduced, privately run boarding houses have all but disappeared, adding financial burdens to the State while depriving residents of their right to chose to live in boarding houses and depriving the State of a vibrant and unique form of accommodation service.
      The Minister of Fair Trading Reba Meagher in 2004 undertook serious investigation of the proposal to introduce legislation protection of boarders and lodgers in NSW. The Minister and The Lord Mayor of Sydney Clover Moore visited boarding and lodgings houses, spoke to boarders and lodgers and owners.
      The Minister's findings were:
      • 'Having personally visited a number of boarding houses, I am aware of the industry and tenancy issues associated with their operation. However following careful consideration of the issues, concerns remain that any specific regulation in this sector may in fact backfire and hurt the people it is intended to help.'
      • Boarding house owners have a commitment to their accommodation business which provides a valuable alternative to residential tenancies. It is a vulnerable, non-growth area providing invaluable accommodation services to lodgers and boarders. Where legislation is introduced which changes the nature of boarding houses, they will cease to exist, causing hardship to residents, not protection.

      *Licensed Residential Centres

      Licenced Residential Care(LRC) Facilities have two or more residents with disabilities that require supervision and rehabilitation. The operation of these facilities is based on 'support and care' with management control essential to the successful operation of that community.
      Licenced Residential Care facilities are unfunded. They have rigorous compliance requirements as determined by:
      • The NSW Health Department
      • Department of Aging and Disability
      The NSW Residential Care Association states that legislation for individual rights of residents will make the LRC's inoperable and lead to their closure.

      source: http://www.poansw.com.au/boardinghouse.php
      free download:
      http://www.poansw.com.au/docs/Basics%20for%20operation%20of%20Boarding%20Houses.pdf

      Saturday, 21 September 2013

      NSW WestConnex approved Parts of Parramatta Road will be rezoned to attract high-density apartments and businesses...


      NSW WestConnex approved Parts of Parramatta Road will be rezoned to attract high-density apartments and businesses...


      This is happening now. Take a drive around Leichhardt on Parramatta Rd . all the way down to the McDonalds towards the City. You will see shop fonts staying the same, BUT above them there are Residential Units Up to 5 Floors going up. They are being approved. 
      You could talk to a town planner and see if you buy a shop with space above it. They might be able to get a multi unit development reconfigured above it. This will mean you have shop income and then up to 10 units pulling in $500 a week income for a buy of around $800000. Plus Renovation cost. But I have seen people doing this over and over again. Classical examples.

      • The government will consider removing general traffic lanes from Parramatta Road, under which the new tunnel will be built. 
      • The government has announced $200 million for the "revitalisation" of Parramatta Road, but does not have detailed plans about how that money would be spent. Mr O'Farrell said it would be spent on "new footpaths, green space, bus lanes, trees and the removal of power poles".
      • Parts of Parramatta Road will be rezoned to attract high-density apartments and businesses, though there is little detail yet on where and when.
      • Bus lanes will be extended along Parramatta Road from Leichhardt to Burwood.
      • The tunnel between Homebush and Ashfield will require exhaust stacks, but the government is not yet saying where they would be. Mr Gay said an "expert committee" would examine exhaust stacks.
      • The government is not releasing forecasts of how many motorists would be expected to use the motorway or the different sections of the motorway.
      Have a look at new developments
      http://www.urbantaskforce.com.au/urbanideas/june2012/files/inc/2058008721.pdf




      Motorists to pay up to $4 a trip on wider M4

      Motorists who currently drive for free on the M4 will be paying a toll of up to $4 a trip when the road is widened in four years, the O'Farrell government announced on Thursday.
      The widening of the M4 between Church Street, Parramatta and Homebush Bay Drive from three lanes in each direction to four will be the first stage of the WestConnex motorway project. It is expected to be finished by early 2017.
      When it is finished, motorists will be charged according to how far they drive along the M4. The toll will range from about $1.50 to $3.90 in today's money, though the cost of that will increase with inflation.

      WestConnex motorway project unveiled

      Prime Minister Tony Abbott joins NSW Premier Barry O'Farrell to explain a new series of roads and tunnels largely under the inner west of Sydney. Nine News.
      The average toll is expected to be about $3, the government said in a summary of the business case for the WestConnex motorway, released on Thursday by Premier Barry O'Farrell and Roads Minister Duncan Gay, who were accompanied by Prime Minister Tony Abbott and Deputy Prime Minister Warren Truss.
      The second section of the WestConnex to be built will be three-lane tunnels in each direction between Homebush Bay Drive and the City West Link. Construction of this section will start in mid-2016 and it will be open to traffic in early 2019.
      Later sections of the WestConnex will be another M5 East tunnel linking to St Peters and a tunnel between Haberfield and St Peters, taking the total cost of the project to $11.5 billion.
      The government will spend $200 million revitalising Parramatta Road. The government will spend $200 million revitalising Parramatta Road. Photo: Wolter Peeters
      "This is the biggest single roads project in NSW history," Mr Gay said.
      Other details to emerge from the business case summary and press conference include:
      • The total motorway will have a capped toll of $7.35 in 2013 dollars, though that will increase with inflation.
      • The government will consider removing general traffic lanes from Parramatta Road, under which the new tunnel will be built. But it says any change to the surface of the road will be subject to community consultation.
      • The government has announced $200 million for the "revitalisation" of Parramatta Road, but does not have detailed plans about how that money would be spent. Mr O'Farrell said it would be spent on "new footpaths, green space, bus lanes, trees and the removal of power poles".
      • Parts of Parramatta Road will be rezoned to attract high-density apartments and businesses, though there is little detail yet on where and when.
      • Bus lanes will be extended along Parramatta Road from Leichhardt to Burwood.
      • The tunnel between Homebush and Ashfield will require exhaust stacks, but the government is not yet saying where they would be. Mr Gay said an "expert committee" would examine exhaust stacks.
      • The government is not releasing forecasts of how many motorists would be expected to use the motorway or the different sections of the motorway.
      Mr Gay rejected the idea that building a three-lane tunnel to Ashfield would cause a bottleneck at the City West Link, which is two lanes in each direction.
      Despite the fact that there are no detailed traffic forecasts, the Roads Minister said "60 per cent of the traffic leaves before it gets to City West Link".
      "There will not be a ... huge increase in the amount of traffic using City West Link," Mr Gay said.
      The government has also significantly changed its plans for the later sections of the motorway. For example, earlier maps for the WestConnex said a tunnel would extend as far east as Sydney University. But the tunnel now extends only to Stanmore, before turning south to St Peters.
      The business model for the WestConnex model differs from previous toll roads in Sydney because the government is planning to fund the bulk of early construction, before selling the motorway off to the private sector once it is open for traffic.
      This means private firms will not have to try and estimate the amount of traffic using the road.
      But neither is the government releasing its own estimates of how many motorists will use the motorway at any time.
      The government has, however, released estimations of significant travel time savings when WestConnex is finished. It says motorists driving between Parramatta Road and the airport will save 40 minutes, and motorists driving between the CBD and Parramatta will save 25 minutes.

      Wednesday, 18 September 2013

      We want to sell to the Chinese Market - what can they buy !!!!


      We want to sell to the Chinese Market - what can they buy !!!!
      Ok download full PDF here 
      http://www.firb.gov.au/content/_downloads/AFIP_2013.pdf
      BUT for now here is the run down.

      GENERAL
      The Government has decided that some types of investment in real estate are contrary to the national interest. This section outlines these prohibitions as well as the types of real estate that foreign investors may buy and whether they need Government approval to do so.
      If you are intending to buy real estate in Australia, you should make your purchase contracts conditional on foreign investment approval, unless you already have approval or you are exempt from the Foreign Acquisitions and Takeovers Act 1975. Significant penalties may apply to ineligible owners of real estate.

      RULES FOR BUYING RESIDENTIAL REAL ESTATE
      It is the Government’s policy that foreign investment in residential real estate should increase Australia’s housing stock. All applications are considered in light of this overarching principle.

      Residential real estate means all land and housing that is not commercial property or rural land. In that regard, ‘hobby farms’ and ‘rural residential’ blocks are residential real estate.

      Temporary Residents Established (Second-Hand) Dwellings
      Temporary residents need to apply if they wish to buy an established dwelling. Only one established dwelling may be purchased by a temporary resident and it must be used as their residence in Australia. Such proposals are normally approved subject to conditions (such as, that the temporary resident sells the property when it ceases to be their residence).
      Temporary residents cannot buy established dwellings as investment properties, but can buy established dwellings for redevelopment (see below).
      New Dwellings
      Temporary residents need to apply to buy new dwellings in Australia. Such proposals are normally approved without conditions.
      Vacant Land
      Temporary residents need to apply to buy vacant land for residential development. These are normally approved subject to conditions (such as, that construction begins within 24 months).


      All Other Foreign Persons Established (Second-Hand) Dwellings
      Non-resident foreign persons cannot buy established dwellings as investment properties or as homes, except as below.
      Foreign persons that operate a substantial Australian business need to apply to buy established dwellings to house their Australian based staff. 
      Such proposals are normally approved subject to conditions (such as, that the foreign person sells the property if it is expected to remain vacant for six months or more).

      Non-resident foreign persons need to apply to buy established dwellings for redevelopment (that is, to demolish the existing dwelling and build new dwellings). Proposals for redevelopment are normally approved as long as the redevelopment increases Australia’s housing stock (at least two dwellings built for the one demolished) or where it can be shown that the existing dwelling is derelict or uninhabitable. Approvals are usually subject to conditions.

      New Dwellings
      Non-resident foreign persons need to apply to buy new dwellings in Australia. Such proposals are normally approved without conditions.

      Vacant Land
      Non-resident foreign persons need to apply to buy vacant land for residential development. These are normally approved subject to conditions (such as, that construction begins within 24 months).

      Who is Exempt?
      You do not need Government approval to buy residential real estate if you are:
      • an Australian citizen (living at home or overseas) or you are ordinarily resident in Australia;
      • a New Zealand citizen;
      • a foreign national who holds an Australian permanent resident visa; or
      • a foreign national buying a property as joint tenants with their Australian citizen spouse.

        Regardless of your citizenship or residency, you do not need Government approval for:

      • new dwellings bought from a developer that has pre-approval to sell them to foreign persons;
      • an interest in a time share scheme that allows you (and any associates)13 to use it for up to four weeks per year;
      • certain residential real estate in Integrated Tourism Resorts – see below;
      • an interest acquired by will or devolution by operation of law; or
      • an interest acquired from a Government in Australia (Commonwealth, State or Territory, or local) or a statutory corporation formed for a public purpose.

        Other exemptions may apply14 if you are:
      • a company, trust or managed investment scheme (primarily) for the benefit of individuals ordinarily resident in Australia;

      • an Australian corporation that is owned by individuals who are exempt15 or an Australian trust for the benefit of such individuals;
        See section 6 of the Foreign Acquisitions and Takeovers Act 1975 for the list of ‘associates’.
        See regulation 3 of the Foreign Acquisitions and Takeovers Regulations 1989.
      • a corporation that is providing custodian services; or

      • buying shares in certain Australian urban land corporations that are publicly listed on an Australian Stock Exchange, or units in certain Australian urban land trusts

        Residential Real Estate in Integrated Tourism Resorts
        You do not need the Government’s approval to buy residential property that is within the bounds of a resort designated as an Integrated Tourism Resort prior to September 1999.
        For resorts designated from September 1999, the exemption only applies to developed residential property that is subject to a lease of 10 years or more to the resort operator and that is available as tourist accommodation when it is not occupied by the owner. The normal foreign investment rules apply to all other property within the resort, including vacant land for development. Conditions must be met to qualify for designation.
      You are an exempt individual if you are an Australian citizen (living at home or abroad), a New Zealand citizen, or a foreign national who holds an Australian permanent resident visa.

      RULES FOR BUYING COMMERCIAL REAL ESTATE
      Commercial real estate includes vacant and developed property that is not for residential purposes, such as offices, factories, warehouses, hotels and shops. It may also include land that does not meet the definition of rural land, such as mining operations.

      All Foreign Persons Vacant Land
      Foreign persons need to apply to buy or take an interest in land for commercial development (including to start a forestry business), regardless of the value of the land. However, if the land is currently being used as rural land, then other rules apply (see Rural Land). Such proposals are normally approved subject to development conditions.

      Developed Commercial Property
      Foreign persons need to apply to buy or take an interest in developed commercial real estate valued at $54 million or more – unless the real estate is heritage listed, then a $5 million threshold applies. New Zealand investors and United States investors only need to apply for developed commercial real estate valued at $1,078 million or more. Such proposals are normally approved without conditions.
      Developed commercial property includes hotels, motels, hostels and guesthouses, as well as individual dwellings that are a part of these properties. A unit in a hotel that is owner-occupied or rented out privately (that is, it is not part of the hotel business) is considered to be residential property.
      Mining Tenements
      Foreign persons need to apply to buy or take an interest in prospecting, exploration, mining or production tenements where:
      • they provide the right to occupy Australian urban land and the term of the lease or licence (including extensions) is likely to exceed 5 years; or
      • they provide an interest in an arrangement involving the sharing of profits or income from the use of, or dealings in, Australian urban land.
        If the mining tenement applies to land currently being used as rural land, then other rules apply (see Rural Land).
        Where a mining tenement is developed to an operational mine, it will then be considered developed commercial property (see above).
        Forestry
        Established forestry businesses are treated as rural land.
      Who is Exempt?
      You do not need Government approval to buy or take an interest in commercial real estate if you are an Australian citizen (living at home or abroad) or you are ordinarily resident in Australia.
      Regardless of your citizenship or residency, you do not need Government approval for:
      • an interest acquired by will or devolution by operation of law;
      • an interest acquired from the Government (Commonwealth, State or Territory, or local) or a statutory corporation formed for a public purpose;
      • an interest in developed commercial property (regardless of value) where the property is to be used immediately and in its present state for industrial or non-residential commercial purposes (the acquisition must be wholly incidental to the purchaser’s proposed or existing business activities); or
      • an interest in developed commercial property valued below $54 million generally or $5 million for heritage listed properties (or $1,078 million for New Zealand investors and
        United States investors).
        Other exemptions may apply16 if you are:
      • a company, trust or managed investment scheme (primarily) for the benefit of individuals
        ordinarily resident in Australia;
      • a corporation that is providing custodian services; or
      • buying shares in certain Australian urban land corporations that are publicly listed on an Australian Stock Exchange, or units in certain Australian urban land trusts.

        RURAL LAND17
        Rural land is land used wholly and exclusively for carrying on a business of primary production. To be a business of primary production, the business must be substantial and have a commercial purpose or character.18
        A foreign person needs approval to buy an interest in a primary production business where the total assets of the business exceed $248 million (or $1,078 million for New Zealand investors and United States investors).
        All foreign government investors must notify the Government and get prior approval before acquiring any interest in rural land.
        16 17 18
      See regulation 3 of the Foreign Acquisitions and Takeovers Regulations 1989. See also Annex 2.
      The definition of a primary production business is taken from the Income Tax Assessment Act 1997. It refers to production resulting from the cultivation of land; animal husbandry/farming; horticulture; fishing; forestry; viticulture or dairy farming. Primary production for the purpose of the rural land definition does not include hobby farms, ‘rural residential’ blocks or land used for stock agistment or mining.

      ANNEX 1 – DEFINITIONS Australian Urban Land
      Australian urban land is any land in Australia that is not rural land. It includes all seabed within Australia’s Exclusive Economic Zone.
      Australian Urban Land Corporation or Trust
      A corporation or trust that has interests in Australian urban land which make up more than 50 per cent of the value of its total assets.
      Direct Investment
      Direct investment in Australia by foreign government investors must be notified regardless of the value of the investment.
      Australia’s foreign investment regime is concerned with investments that provide the investor with potential influence or control over the target (entity or asset(s)), including any offshore acquisition providing this over an Australian business or asset(s).
      Any investment of an interest of 10 per cent or more is considered to be a direct investment.
      Investments that involve interests below 10 per cent may also be considered direct investments if the acquiring foreign government investor is building a strategic stake in the target, or can use that investment to influence or control the target. In particular, an investment of less than 10 per cent which includes any of the following is considered to be a direct investment and must be notified:
      • preferential, special or veto voting rights;
      • the ability to appoint directors or asset managers;
      • contractual agreements including, but not restricted to, agreements for loans, provision of services and off take agreements; or
      • building or maintaining a strategic or long-term relationship with a target entity.
        Retaining an interest of 10 per cent or more following the enforcement of a security interest
        19 is
        also considered a direct investment.
      19
      Authorised Deposit taking Institution, see footnote 2.
      If a foreign government investor that is regulated by the Australian Prudential Regulation Authority as an
      Foreign Government Investors
      Foreign government investors include:
      • a body politic of a foreign country;
      • entities20 in which governments, their agencies or related entities from a single foreign country have an aggregate interest (direct or indirect) of 15 per cent or more;
      • entities in which governments, their agencies or related entities from more than one foreign country have an aggregate interest (direct or indirect) of 40 per cent or more; or
      • entities that are otherwise controlled by foreign governments, their agencies or related entities, and any associates, or could be controlled by them including as part of a controlling group.
        Foreign Person
        A foreign person is:
      • a natural person not ordinarily resident in Australia;21
      • a corporation in which a natural person not ordinarily resident in Australia or a foreign corporation holds a controlling interest;
      • a corporation in which two or more persons, each of whom is either a natural person not ordinarily resident in Australia or a foreign corporation, hold an aggregate controlling interest;
      • the trustee of a trust estate in which a natural person not ordinarily resident in Australia or a foreign corporation holds a substantial interest; or
      • the trustee of a trust estate in which two or more persons, each of whom is either a natural person not ordinarily resident in Australia or a foreign corporation, hold an aggregate substantial interest.
        Heritage Listed
        Commercial developed property is heritage listed where the property, or part of the property, is listed for its heritage value by a Government (Commonwealth, State or Territory, or local), or is subject to a heritage overlay or similar designation.
        Joint Tenants
        Two or more persons that hold property jointly so that each owns an undivided share of the whole. Should one person die, their interest would pass to the surviving co-owner or co-owners.
        20 21
        Australian urban land.page15image19528 page15image19688 page15image19848 page15image20008 page15image20168
      Entities include companies, trusts and limited partnerships.
      This may include some Australian citizens living abroad,
      except when they are acquiring
      page15image21640 page15image21800
      Media Sector
      The media sector refers to daily newspapers, television and radio (including internet sites that broadcast or represent these forms of media).
      New Business
      A new business includes:
      • starting a business in Australia; or
      • if already operating a business in Australia, commencing a new primary activity that is not incidental to an existing primary activity(s) and that falls within a different Division under the Australian and New Zealand Standard Industrial Classification as published by the Australian Bureau of Statistics.
      New Dwellings
      A dwelling that has not been previously sold by the developer and has not been previously occupied (such as, by tenants) for more than 12 months.

      New dwellings include those that are part of extensively refurbished buildings where the building's use has undergone a change from non-residential (for example, office or warehouse) to residential. It does not include established residential real estate that has been refurbished or renovated.

      New Zealand Investor
      A New Zealand national; a New Zealand enterprise; or a branch of an entity located in New Zealand and carrying on business activities there.

      New Zealand National
      An individual who is a citizen, national or permanent resident of New Zealand. It does not include a person who is a national of the Cook Islands, Niue or Tokelau and is not permanently residing in New Zealand.

      New Zealand Enterprise
      A New Zealand enterprise is an entity constituted or organised under a law of New Zealand. The form in which the entity may be constituted or organised may be, but is not limited to, a corporation, a trust, a partnership, a sole proprietorship or a joint venture.

      Branch of an Entity Located in New Zealand
      A branch may be ‘carrying on business activities in New Zealand’ where it is doing so: in a way other than being solely a representative office; and in a way other than being engaged solely in agency activities, including the sale of goods or services that cannot reasonably be regarded as undertaken in New Zealand; and by having its administration in New Zealand.

      Ordinarily Resident
      A person is ordinarily resident if:
      • their continued presence in Australia is not subject to any limitation as to time imposed by law (that is, they are permitted to stay in Australia indefinitely, such as Australian permanent residents and New Zealand citizens); and
      • the person has actually been in Australia for 200 or more days in the previous 12 months. Prescribed Sensitive Sectors
        The prescribed sensitive sectors are:
        • media;
        • telecommunications;
        • transport (including airports, port facilities, rail infrastructure, international and domestic aviation and shipping services provided within, or to and from, Australia);
        • the supply of training or human resources, or the manufacture or supply of military goods or equipment or technology, to the Australian Defence Force or other defence forces;
        • the manufacture or supply of goods, equipment or technology able to be used for a military purpose;
        • the development, manufacture or supply of, or the provision of services relating to, encryption and security technologies and communications systems; and
        • the extraction of (or the holding of rights to extract) uranium or plutonium or the operation of nuclear facilities.
          Spouse
          Spouse includes a de facto partner (whether of the same sex or a different sex) – that is, although they may not be legally married, they have a relationship as a couple and live together on a genuine domestic basis (sections 22A and 22B of the Acts Interpretation Act 1901).
          Substantial Interest (in a corporation)
          A substantial interest occurs when a single foreign person (and any associates)22 has 15 per cent or more, or several foreign persons (and any associates) have 40 per cent or more, of the issued shares, issued shares if all rights were converted, voting power, or potential voting power, of a corporation.
          When a person(s) has a substantial interest, they are taken to hold a controlling interest, unless the Treasurer is satisfied that, having regard to all the circumstances, the person(s) is not in a position to determine the policy of the corporation.page17image19808 page17image19968
      22
      See section 6 of the Foreign Acquisitions and Takeovers Act 1975 for the list of ‘associates’.
      page17image21888
      Substantial Interest (in a trust)
      A substantial interest occurs when a single foreign person (and any associates)23 has 15 per cent or more, or several foreign persons (and any associates) have 40 per cent or more, beneficial interest in the income or capital of the trust estate. Where the trustee has the power or discretion as to the distribution of the income or capital of the trust estate, each beneficiary is taken to hold a beneficial interest in the maximum percentage of income or capital that could be distributed to them.
      Temporary Resident
      A person that is residing in Australia and:
      • holds a temporary visa which permits them to stay in Australia for a continuous period of more than 12 months (regardless of how long remains on the visa); or
      • has submitted an application for permanent residency and holds a bridging visa which permits them to stay in Australia until that application has been finalised.
        United States Investor
        A United States national; a United States enterprise; or a branch of an entity located in the United States and carrying on business activities there.
        United States National
        A national of the United States of America, as defined in Title III of the Immigration and Nationality Act of the United States of America, or a permanent resident of the
        United States of America.

        United States Enterprise
        A United States enterprise is an entity constituted or organised under a law of the
        United States of America. The form in which the entity may be constituted or organised may be, but is not limited to, a corporation, a trust, a partnership, a sole proprietorship or a joint venture.

        Branch of an Entity Located in the United States
        A branch may be ‘carrying on business activities in the United States’ where it is doing so: in a way other than being solely a representative office; and in a way other than being engaged solely in agency activities, including the sale of goods or services that cannot reasonably be regarded as undertaken in the United States; and by having its administration in the
        United States.page18image20144 page18image20304 page18image20464 page18image20624 page18image20784
      23
      See section 6 of the Foreign Acquisitions and Takeovers Act 1975 for the list of ‘associates’.
      English version (2013) 

      Previous Article 2012

      Foreign investment: Don’t ask, don’t tell, don’t know

      Date
      Chris Vedelago

      Propertyland Blog

      Chris Vedelago is The Sunday Age's property reporter, and writes the weekly "Market Wrap" column.

      it does or a government that has no idea what it’s doing?
      The answer is the Australian government, which can apparently do both simultaneously.
      It’s been nearly a year since I filed a freedom of information request in bid to get some basic facts and figures about the work of the Foreign Investment Review Board, the commonwealth department tasked with monitoring and regulating overseas investment in the residential real estate sector.
      The application came in the wake of the Labor government’s April 2010 announcement of ‘‘strict’’ new rules governing the purchase of homes by foreigners and a crackdown on those who violate the law through a ‘‘very tough’’ new enforcement and penalty regime.
      The cornerstone of the policy was that temporary residents now had to seek FIRB approval to buy an established home and would be required to sell it once they left the country.
      The FOI request, lodged in November 2011, sought any documents about FIRB’s monitoring and compliance activities involving temporary residents — how many had applied, been approved to buy, and what, if any, investigations had been conducted or penalties levied for violations of the law.
      In response, FIRB repeatedly blocked access to the information on the farcical grounds that its release wasn’t in the public interest, sparking a lengthy appeals process I chronicled in the blog posts ‘‘Secret Government Business’’ and ‘‘Secret Government Business Part II".
      After a lot more wrangling, FIRB has finally released a handful of documents that — while incomplete and heavily redacted — suggest the regulator has either woefully failed to do its job or is abusing the FOI system.
      The eight censored (and blank) pages I received indicate FIRB has not initiated any compliance investigations or activities relating to temporary residents since the foreign investment rules were tightened.
      In May 2010, FIRB notified Treasury that applications from temporary residents to buy established homes had doubled since the April announcement. In July, it was noted applications had quadrupled, which were being logged in a database to ‘‘allow compliance officers to follow up in due course’’ (an observation repeated in October).
      And that was it — FIRB made no further reference to any planned, new, ongoing or completed compliance work.
      As for FIRB holding any information about checks on whether temporary residents were, in fact, selling up when they left the country, the regulator stated: ‘‘no documents have been found that would fall within the terms...of the request. I refuse access to documents on the grounds that no documents exist’’.
      It’s a stunningly blank record considering the clampdown on foreign buyers was deemed necessary because of the existing ‘‘inadequate’’ compliance and penalty regime, according to then assistant treasurer Nick Sherry.
      ‘‘The new provisions announced today will mean that anyone trying to flout Australia’s strict foreign investment rules will face tough new penalties that will be fully enforced,’’ he had said.
      Sherry also announced that a ‘‘significant’’ new data-matching program was already being trialled in Sydney and Melbourne, which, when rolled out nationally, would link land title and immigration records.
      And, yet, in the 19 months between the Labor government’s self-declared crackdown and my FOI application no investigation into the activities of temporary residents seem to have been launched.
      In fact, the response to the FOI shows that FIRB didn’t produce a single document mentioning its putative compliance program after Oct 2010 — more than a year before the FOI request was lodged.
      Of course, given the wide-ranging powers the government has to exempt information from release, FIRB could have just decided to withhold what it’s been up to in all those blanked-out and missing pages.
      Despite originally identifying 19 documents (66 pages) as ‘‘potentially falling within the scope’’ of my request, they saw fit to release only 3 documents (8 pages), and heavily redacted ones at that.
      FIRB certainly has form for being zealously secretive and disdainfully dismissive about public disclosure.
      Even a simple request for the number of applications that have been lodged by temporary residents was denied because providing such a figure would ‘‘necessitate a substantial and unreasonable diversion of resources’’.
      That's their argument despite FIRB notifying Treasury that applications had ‘‘doubled’’ by May 2010 and then increased ‘‘four-fold’’ by July 2010.
      It’s clear the numbers exist, they just won’t be released.
      Which naturally leads to the question of why.
      The Labor government's pathetic record on FOI issues and slap-dash way of making foreign investment policy are clearly at play.
      But one other potential answer comes courtesy of a Propertyland reader who sent an email to FIRB in support of my FOI application and received an illuminating response in return.
      ‘‘The Foreign Investment Review Board (FIRB) is a non-statutory advisory body, and as such is not subject to legally binding reporting requirements,’’ FIRB's secretariat wrote.
      In other words, we should just be thankful for whatever scraps of information they'll deign to distribute.
      Many other readers also sent emails to the government backing my application, all of which challenged the notion that there was no public interest in the release of this kind of information (thanks, by the way).
      When they weren’t ignored, they got the kind of pap above.
      Following FIRB’s dismal level of disclosure, I have applied for a review of the decision with the Australian Information Commissioner.