The ability of a foreign national to make the purchase of real estate in Australia requires governmental permission. Before a foreign national can commence seriously the pursuit of real estate to purchase in Australia, he or she must seek and obtain permission to purchase real estate from the Foreign Investment Review Board. Whether a person is seeking to purchase residential property or investment real estate, it is important to initiate the approval process with the Foreign Investment Review Board early on. Indeed, most people apply for approval from the Board at least ninety days prior to launching a more concentrated search for real estate to purchase in Australia.

When it comes to a foreign national investing in residential or commercial real estate in Australia, getting approval from the Foreign Investment Review Board really is the most cumbersome portion of the entire process. Once this approval has been tendered by the governing Board, the process of satisfying the legal requirements to purchase and own real estate in Australia surprisingly is rather simplistic. Overall, most real property in Australia is sold either through what is known as a conventional channel or through auctions. In considering the conventional course of purchasing real estate in Australia, when a foreign national identifies a property that he or she is interested in purchasing, he or she need only convey an offer to the seller.

In Australia, this initial offer can be verbal or in writing. Once received by the seller, the seller will either accept or reject the offer that has been tendered. In many instances, if the offer is not at the price the seller has set for the property, the seller may counteroffer. In any event, if an offer (or counteroffer) ultimately is accepted, a Contract for Sale will then be drafted. After the acceptance of the initial offer, the buyer is obliged to make what is known as a holding deposit. Generally speaking, the holding deposit is 10% of the total price agreed upon for the sale of the real estate in question. During the period of time in which the Contract for Sale is being prepared and drafted, a buyer or seller maintain the ability to back out of the transaction. If this occurs, more often than not, the buyer is entitled to a refund of the entire holding deposit.

In most locales in Australia, once the Contract for Sale the deposit that is made by the buyer becomes irrevocable — in short, the buyer can’t get his or her deposit money back. However, in some Australian states there is a ten day “cooling off period” following the execution of the contract for sale. Within this time period, if the seller decides to back out of the contract, he or she can do so without losing the security deposit. There may be some financial penalty to backing out of the deal, but the majority of the initial deposit will be refunded.