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Western Australia has a population of approximately
1.83 million, of which some 1.34 million are situate in Perth,
the capital city.
Many Singaporeans have already invested in Perth
to take advantage of the wonderful outdoor life and excellent
education facilities for children.
This paper briefly covers some of the issues,
which a Singaporean wishing to invest in Perth ought to be aware
of.
Foreign Investment Review Board ("FIRB")
Australian Government policy is to seek to ensure
that foreign investment in residential real estate increases
the supply of residences and is not speculative in nature. The
policy therefore seeks to channel foreign investment in the
housing sector into activities that directly increase the supply
of new houses, such as new developments. Obviously this in turn
brings benefit to the local building industry and their suppliers.
All foreign interests intending to invest in
real estate in Australia are required to seek prior approval
of FIRB. Foreign interests include a natural person not ordinarily
resident in Australia, a foreign corporation and a trust in
which the beneficiaries are foreign persons or foreign corporations.
Residential real estate means all Australian
land other than commercial properties. Hobby farms and rural
residential blocks are included within the definition of "residential
real estate".
Acquisitions of developed residential real estate
by foreign interests are not normally approved, except for the
following categories:
- acquisitions by foreign companies with an
established business in Australia buying for senior executives
for periods longer than 12 months;
- foreign nationals temporarily resident in
Australia holding a current temporary resident visa;
Acquisitions of residential real estate (including
vacant land) for development by foreign interests are normally
approved subject to a requirement of construction in the near
future.
Applications to acquire existing residences for
redevelopment are considered on a case by case basis. The age
of the current improvements on the land and the amount expended
on the redevelopment are relevant features.
Foreign interests acquiring "off the plan" will
normally be approved. The property purchased under this category
may be rented out, sold to Australian interests or other eligible
purchasers or retained for the foreign investors' own use.
Acquisitions of commercial real estate by foreign
interests must also be submitted to the Government through FIRB
for approval. There are a number of exemptions. A major exemption
is where the value is less than $5,000,000, unless the land
is vacant, or the whole or part of the land comprises an accommodation
facility or the agent of a foreign government is acquiring the
property.
Acquisitions of developed commercial real estate
valued at $5,000,000 or more are normally approved. FIRB will
not give in principle approval to applications. The actual application
with all specifics must be made.
Fees of Real Estate Agents in Western Australia
A purchaser of property is not normally concerned
with brokerage, unless he or she engages an agent to find a
property for them. If they have not engaged a purchaser's agent,
the costs of the vendor's agent will be met by the vendor from
the sale price.
It is not uncommon for persons from other countries
to engage a local agent to advise in respect of locations and
to seek a property which fits the potential investor's criteria.
If a prospective purchaser does engage an agent,
the commission that the agent is now able to charge is negotiable.
Previously there was a fixed fee on a sliding scale.
Stamp Duty
Stamp duty is payable by the purchaser of real
estate on a sliding scale. It is applicable to every acquisition
of real estate.
The rate is on a sliding scale commencing at
1.95% for properties under $80,000 rising through three increased
rates to a final rate of 4.85% on the amount by which a property
exceeds $500,000.
Talbot & Olivier
Our firm has been actively involved in the property
market in Western Australia for many years and is experienced
in all aspects of property law, including acquisitions by foreign
interests. We act for a number of clients from South East Asia,
and particularly, Singapore.Indeed one of our solicitors, Miss
Melanie Lim, is from Singapore.
Again, a sliding scale of fees applies in acting
for a purchaser or a vendor. As a guide, our fees in acting
for a purchaser for a property worth $500,000 would be approximately
$1,350.
If additional matters were required to be attended
to, such as an application for FIRB approval, additional costs
will be charged.
Talbot & Olivier Level 10 55 St George's Terrace
Perth 6000 Western Australia Tel: (618) 9325 8977 Fax: (618)
9221 1886 email: talbots@talbotolivier.com.au
Contact: David Williams Paul Kordic Earle Scarff
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