In the event your Buyer is a foreign buyer (a buyer without a permanent Visa), it is important to know whether your Buyer is purchasing a property to live in for the duration of the temporary Visa or if they are buying solely for investment purposes. A foreign buyer’s classification under the Foreign Acquisitions and Takeovers Act 1975 can differ immensely depending on both the Buyer’s Visa position and the basis for their purchase.
The Foreign Investment Review Board (FIRB) will make determinations on a case by case basis, and this can take up to 30 days, plus a further 10 days in which to respond. Obviously this has implications for critical dates to your Contract, so ensure that the Contracts themselves are conditional on the Buyer obtaining FIRB approval.
In the event the Buyer is purchasing an existing dwelling for their own residential purposes, then they may obtain an exemption certificate, but this is not without costs. If however the Buyer is purchasing a new dwelling, recently built by a developer, the developer may sometimes have an exemption certificate known as a New (or Near-New) Dwelling Exemption Certificate, meaning that your foreign Buyer will not be required to go to the expense in obtaining one themselves.
Then there is the Stamp Duty issues to consider. Your foreign Buyer will not only need to pay the stamp duty that any other Buyer would ordinarily pay, but your foreign Buyer will also be hit with an Additional Foreign Acquirer Duty (AFAD) which is an additional 7% of the Buyer’s standard dutiable liability.
Between the additional costs of AFAD and the numerous application options under FIRB, it is critical to always ensure that your foreign Buyer has sought legal advice as to the best application process for their specific circumstances before entering a contract of sale for residential land.