Can a NZ Company buy property in Australia?
As you may be aware, being a NZ citizen an individual is exempt from requiring approval from the FIRB when purchasing property in Australia. However, this exception is not available for companies.
A NZ company is able to purchase Australian residential property through offshore ownership. Before this can be done, a company must submit an application to the Australian government for permission to purchase residential property.
Australian Requirements
Australia has somewhat strict laws regarding offshore investment in residential property. As a result, it is a requirement of the Australian government that the investment must either go toward a new dwelling. This means investors must purchase vacant land or new buildings that have not yet been occupied. The only exception to this rule is if an investor plans to buy an existing residential property and redevelop it. This redevelopment must be completed within 4 years and proof sent to the appropriate authority. We advise a company looking to invest to contact an Australian property lawyer for the best advice.
A NZ company buying a residential property in Australia is generally undesirable. This is because the setup is slightly complex and requires additional compliance. The likelihood of double taxation arises, and the capital gains tax discount differs in Australia for companies. It is advised to purchase the property personally. However, NZ has DTA with Australia so foreign tax credits will be issued.
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