The Federal Government has announced new measures which will result in increased scrutiny of foreign investment in Australian agricultural land. Firstly, the Foreign Investment Review Board screening threshold for purchases of agricultural land by foreign non-government investors will be reduced, effective from 1 March 2015, from $252 million to $15 million (in aggregate taking into account all agricultural land already held by the investor). Secondly, additional measures to improve the collection of, and reporting on, information about foreign investment in agricultural land will be implemented. The Government is also consulting on a number of matters including reforms to foreign investment in residential real estate, a new penalty regime for breaches of foreign investment rules and the definition of agribusiness (for the purpose of implementing a new screening threshold on agribusiness investments).
The Federal Government has formally announced a reduction in the Foreign Investment Review Board (FIRB) notification threshold for purchases of agricultural land by foreign non-government investors from $252 million to $15 million (in aggregate taking into account all agricultural land already held by the investor). The reduced threshold will be effective from 1 March 2015.
Consistent with free-trade agreement commitments, the reduced threshold will apply to all non-government investors except those from the United States, New Zealand, Chile, Singapore and Thailand. All foreign government investors must continue to notify FIRB of all purchases of agricultural land, regardless of value.
According to the FIRB website, further details will be provided in a revised version of Australia’s Foreign Investment Policy, to be released shortly.
The Government has also announced that:
- it intends to move ahead with the foreign ownership register of agricultural land (initially announced under a previous government) to strengthen reporting requirements and provide a clear picture of foreign investment in Australia’s agricultural sector;
- from 1 July 2015, the Australian Tax Office will start collecting information on all new foreign investment in agricultural land regardless of value and will commence a stock take of existing agricultural land ownership by foreign interests; and
- it will continue to work with state and territory governments so that the ATO register will use land title transfer information.
See media release on 11 February 2015.
In addition, the Government is seeking consultation on:
- increasing compliance and enforcement activities around foreign investment in residential real estate through the creation of a specialised investigative and enforcement area within the ATO;
- introducing new civil penalties and increased criminal penalties for foreign investors and third parties who breach the foreign investment rules;
- introducing an application fee on all foreign investment proposals, based on the type of investment; and
- a new definition of agribusiness for the purpose of introducing a new $55 million screening threshold for foreign investment in Australian agribusiness.
See media release on 25 February 2015.
An Options Paper - Strengthening Australia's Foreign Investment Framework has been released which seeks feedback from interested stakeholders on the proposed changes to the foreign investment framework outlined above. Submissions on the Options Paper are due by 20 March 2015.