Due to the Coronavirus emergency, Australian Government has announced several special economic measures. Along with the well-known measures announced in recent months – i.e. the increased threshold for Instant Asset Write-Off (IAWO) and the cash flows boost for employers which will provide up to $100,000 AUD to go back to business, the Treasurer has announced changes to Australia’s foreign investment review framework that amends some notes to the 29th March measures.
On 29 March 2020, the Treasurer announced that due to the impacts of the coronavirus outbreak, all monetary screening thresholds will be temporarily reduced to $0. Starting from 10:30 pm AEDT 29 March 2020, proposed foreign investments into Australia subject to the Foreign Acquisitions and Takeovers Act 1975 (the Act) will require approval, regardless of value or the nature of the foreign investor. This temporary change will be achieved by reducing the monetary screening thresholds to $0 for all foreign investments under the Act. The changes will apply to all foreign persons subject to the Act – no matter investor’s country of origin, and whether they are a private foreign investor or a foreign government investor.
As announced on the FIRB website on 23 March 2020, the Treasurer will consider refunding a fee paid where the measures being implemented globally, and in Australia by governments, businesses and individuals in relation to the coronavirus pandemic have resulted in delays to, or deferrals of, investment decisions that are currently the subject of a foreign investment application, and the applicant wishes to withdraw that application.
A lower fee applies for acquisitions of interests in non-vacant commercial land with consideration of $55 million or less by foreign government investors. Prior to the $0 screening threshold changes, only foreign government investors were screened for low-value non-vacant commercial land. However, as acquisitions for non-vacant commercial land are now subject to a $0 threshold, a differentiated fee outcome for this type of acquisition between $10 million and $55 million exists. Namely, foreign government investors will be required to pay a fee of $2,000, while foreign non-government investors will be required to pay a fee of $26,200.
The effect of this Guidance Note is as follows:
|Foreign non-government investors proposing to acquire non-vacant commercial land where the consideration is…||Payable fee at time of application||Effect of Guidance Note 53|
|$10 million or less||$2,000||Unaffected|
|Above $10 million and not more than $55 million||$26,200||Fee waivers will be considered and processed on a per-application so that the foreign non-government investor will ultimately pay the same fee as foreign government investors.|
|Above $55 million and not more than $1 billion||$26,200||Unaffected|
|Above $1 billion||$105,200||Unaffected|
If an interest is being acquired in a land entity which holds non-vacant commercial land, the standard fee for an interest in an Australian entity action will continue to apply (if applicable).
If you wish to know more about Australian measures and real estate market, Fidinam (Australasia) Real Estate is keen to help you on this.