Western Australia's property market continues to attract significant foreign investment, particularly in the commercial, agricultural, and resources sectors. The Foreign Investment Review Board framework imposes important obligations on foreign investors acquiring interests in Australian land, and recent changes to the regime demand careful attention.
Under the Foreign Acquisitions and Takeovers Act 1975 (Cth), foreign persons must notify FIRB and receive a no-objection notification before acquiring an interest in Australian land above certain monetary thresholds. The thresholds vary depending on the type of land, the nationality of the investor, and whether the land is classified as agricultural, commercial, or residential.
For agricultural land, the cumulative threshold is $15 million for most investors, meaning that a foreign person who already holds agricultural land in Australia must notify FIRB if a new acquisition would bring their total holdings above this level. For commercial land, the threshold varies but is generally $310 million for investors from free trade agreement countries and $0 for all others.
The penalties for failing to comply with FIRB requirements are severe. Criminal penalties of up to $3.3 million for individuals and civil penalties of up to the greater of $33 million or 30% of the value of the acquisition can apply. FIRB also has the power to make divestiture orders, requiring a foreign investor to sell an interest acquired in breach of the Act.
Western Australian agricultural land has been a particular focus of FIRB scrutiny in recent years, given the state's significance as an agricultural producer. Investors acquiring pastoral leases, farming properties, or water entitlements need to be particularly careful to ensure compliance.
We advise foreign investors considering property acquisitions in Western Australia to engage legal counsel early in the process, conduct thorough due diligence on the FIRB implications of any proposed transaction, factor FIRB approval timeframes into transaction timetables, and consider the ongoing compliance obligations that attach to approved acquisitions. The FIRB framework is complex and the consequences of non-compliance are significant. Early professional advice is essential.