Inbound foreign investment in Queensland – FIRB & duties issues

Australia’s foreign investment framework requires would-be purchasers of residential real estate to apply for foreign investment approval. Applications are considered by the Foreign Investment Review Board (FIRB) in line with the general principle that the proposed investment should add to Australia’s housing stock.

In recent years, tax issues have become a major focus of the FIRB’s review of potential investment into the property sector. At the same time, at a local level, the Queensland Government has introduced a number of new policies related to taxes affecting property and investment.

In March, McCullough Robertson's Duncan Bedford ATI will present the session, ‘All things inbound foreign investment’, at the Property and Construction Intensive in Brisbane.

Here we speak with Duncan about some of the current issues facing advisers.

Duncan Bedford ATI
He told us: “The Foreign Investment Review Board is changing, and much of the administration is now being undertaken by the ATO. It is no longer a rubber stamp, and getting it wrong can have material consequences. In Queensland, we’ve seen duty rates for foreign investors increase to 12.75% with the foreign purchaser duty surcharge.

"Knowing when these rates will apply is vital for clients to be able to make informed investment decisions, and knowing how to take advantage of the relevant exemptions is now more valuable than ever.”

Duncan will presents a two-part session on day one of the Intensive. While the first part will look in-depth at FIRB issues, the second will look at those recently introduced additional state taxes that apply specifically to foreign investors, including the foreign purchaser surcharge duty, absentee land tax surcharges and the vacant property taxes that can apply to foreign landowners.

“In the first session, I’m aiming to identify when FIRB rules apply, but also provide some useful tips on how to take advantage of the exemptions, concessions and fee waivers that may be available. I’m hoping to provide some practical tips on the application process, cover some alternative approval mechanisms, such as exemption certificates, and explain how some of the new rules apply in practice – for example, the new rules relating to ‘near new’ dwellings,” Duncan said.

“In the session looking at duty and land tax, the focus will be on the surcharges that apply in Queensland, but the paper I’m presenting will cover all jurisdictions and is intended as a reference guide for taxpayers and advisers to be able to quickly identify if the rules are likely to apply to them, or their clients. It will be more technical in nature than the FIRB session, but will also include practical tips and highlight some of the more common traps that we see in practice.”

As a Partner in the Corporate and Commercial group at McCullough Robertson Lawyers, Duncan has two technical specialties: stamp duty and foreign investment.

“Imagine my reaction when the state governments decided to combine my two favourite topics to make the foreign purchaser duty surcharge,” he joked.

Duncan has been affiliated with The Tax Institute for almost a decade. He has served on the organising committee for, and presented at, the Property and Construction Intensive since its inception.

Asked about other sessions he’s keen to see at the Intensive, Duncan said “I’ve seen the paper Michael Churchill will present in his session, ‘Valuations for Non-Valuers’, and it addresses valuation issues in a way that is particularly relevant to tax professionals”.

This may be one of the last chances for practitioners to hear from Duncan in 2018.

“I’m currently planning my long service leave for the end of the year – a self-drive safari through the Kalahari Desert and the Okavango Delta with my wife and children.”

This year’s Property and Construction Intensive program will consider the global and regional macro and micro economic conditions and their impact on Queensland, and will look at the future global trends and their likely effect on the property and construction industry. A wide range of practical sessions will cover GST, capital allowances and tax depreciation, financing, stapled securities, superannuation, and more.

Find out more about the program on our website. Join us in Brisbane on 22-23 March 2018.

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