Foreign Buyers in Victoria: FIRB Obligations That Continue After Settlement

Conditions continue after settlement

Getting foreign investment approval is the start, not the end. Approvals usually carry conditions, and foreign owners have reporting and tax obligations for as long as they hold the property. Breaches can lead to penalties, or in serious cases an order to sell.

Treat the approval letter as a set of ongoing obligations. Common conditions on residential land include starting and completing construction on vacant land within a set time, not leaving dwellings vacant, limits on transfers, and reporting to the ATO or Treasury. If your plans change, for example from build-to-sell to build-to-rent, check that the approval still covers the new plan before you act.

Ownership changes and reporting

The Foreign Acquisitions and Takeovers Act 1975 (Cth) looks at who controls and benefits from the land, not just whose name is on the title. Get advice before transferring shares or units in the holding entity, admitting new investors, amending a trust deed to allow foreign beneficiaries, or giving a lender rights that go beyond ordinary security.

Acquisitions, and certain later changes including disposals, must be notified on the Register of Foreign Ownership of Australian Assets within the required time. Foreign owners of dwellings must lodge an annual vacancy fee return with the ATO. A fee applies if the dwelling is not occupied, or genuinely available for rent, for at least 183 days in the year. Since 1 April 2025, foreign persons have generally been banned from buying established dwellings, with limited exceptions. The ATO says the ban now runs to 30 June 2029.

Victorian surcharges

In Victoria, foreign purchasers of residential property pay foreign purchaser additional duty of 8% of the value, on top of ordinary land transfer duty. Absentee owners pay an annual land tax surcharge, currently 4%. A change in residency, shareholding or trust beneficiaries can change your position. Holding through an Australian company or trust does not avoid the rules if foreign persons control the board, receive the distributions or direct how the land is used.

Keep every approval letter and its conditions in a register with due dates. Review compliance once a year, and before any restructure, refinance, new investor or change of use. If you hold Victorian property with any foreign ownership, including indirect ownership, call (03) 8658 7069.

General information only, not legal advice. For advice on your matter, call MWBL Consulting on (03) 8658 7069.