Earlier this year, rules were put into place requiring foreign purchasers of agricultural land worth more than $15 Million to face the Foreign Investment Review Board (FIRB) first. The Australian government does not oppose foreign investment but it must be transparent and shown to be in the national interest. The FIRB must have confidence that this investment is coming in on their terms and for the nation’s benefit. “We need to develop the architecture for successful and sustained agricultural investment.”
From July 1 of this year, the Australian Tax Office (ATO) has also started collecting information on all new foreign investment in agricultural land regardless of value, and has commenced a stocktake of existing agricultural land ownership by foreign interests. The ATO register will also use land title transfer information from State and Territory governments.
"These measures are a significant step in protecting Australia’s national interests and in giving the community greater confidence in our foreign investment regime," the statement said.
Ausbuy CEO Lynne Wilkinson says the issue of food security is paramount to the rest of the world and should also be to Australia. “When countries buy our land it raises issues of sovereign risk, and in our grab for cash we lose the intellectual property of generations of Australian farmers. We cannot guarantee the food grown on this land will stay in Australia or that the profits from exports will be here.”
The new $15 million screening threshold will apply to the cumulative value of agricultural land owned by the foreign investor, including the purposed purchase.
Overseas investment groups shown the most interest set to acquire large Australian farms, with real estate group Raine and Horne announcing a deal to assist mostly foreign-based investors buy $600 million in agricultural assets.
The investors are looking to secure a large portfolio of crop interests, wheat farms and processing facilities across the country that will not be selling on the open market. Their plans follow a recent announcement that one of China’s largest beef producers, Chongqing Hondo Agricultural Group, is looking to buy up to $100 million worth of Australian cattle stations in the next year.
Top quality agricultural land has never been more valuable. An example of this new rule in affect was last month when the FIRB blocked the sale of the country's largest landowner, private farming group S. Kidman and Co, to foreign investors, saying an agricultural area the size of South Korea should remain in Australian hands. Ownership of farmland is a sensitive political issue in Australia amid concerns that foreign buyers are snapping up properties to cash in on a boom in food demand from Asia. S. Kidman and Co's 10 cattle stations cover more than 100,000 sq km (25 million acres) of land spread across Western Australia, the Northern Territory, Queensland and South Australia.
If you are a foreigner looking to buy a small farm, rural property, or commercial property under $5,000,000.00, then approval from the FIRB is not needed. A foreign person who holds a visa which entitles them to remain in Australia for more than one year will generally be granted permission to buy a house that is already built, providing that they live in the house and sell it when their visa expires.