ALERT: Federal Government announces FIRB fees doubled for all investments as of this Friday
On Friday afternoon, the Federal government announced a decision had been made that will see FIRB fees doubled for all investments effective from 29 July 2022 (this Friday).
FIRB fees are set to be raised on all foreign investment transaction types – including land acquisitions, business acquisitions, exemption certificates, and internal reorganisations. In some cases, the fees are more than doubled, with the top fee being raised from $500,000 to $1,045,000.
While the fee increases were announced during the federal election, and forms part of the Labor government's reform package surrounding housing affordability, there was no public or industry consultation period.
The fee increases apply to all land investments in farming, mining, manufacturing, commercial property and housing development.
If you would like to know more about the fee increases and how they may impact you, please get in touch with your regular Madgwicks contact or we can guide you to the best-placed member of our staff to assist you on calling +61 3 9242 4744.
Fees increased previously in 2022
The doubling of FIRB fees also comes on top of the very large increases which already occurred from 1 January 2021. The table below gives an indicative range of the fee changes – for a $500m investment in commercial property, the fees have increased ninefold in just two years.
|Transaction type||Fee to 2020||Fee from 1 January 2022||Fee from 29 July 2022|
|$500m commercial land||$26,700||$118,800||$237,600|
Source: Property Council of Australia
Fees at these levels begin to have an impact on investment and distort market behaviour, as noted by the Productivity Commission, reducing foreign investment, leading to lower Australian wages and incomes (see Productivity Commission Report into Foreign Investment in Australia, June 2020).