Foreign Investors beware – FIRB fees to double from 29 July 2022
The Treasurer has announced on 22 July 2022 that as part of Albanese Labor Government’s election commitment, foreign investment fees and penalties will increase effective from 29 July 2022. The Government’s position is that this will generate an additional $455 million in Budget revenue over the forward estimates. No public consultation was conducted by the Government because the Amending Regulations implement an announced election commitment.
The Foreign Acquisitions and Takeovers Fees Imposition Amendment (Fee Doubling) Regulations 2022 (Cth) can be accessed here. The increased foreign investment fees will apply to notifications and applications made on or after 29 July 2022.
To clarify, if notifiable action or application was made prior to 29 July 2022, then investors will only be required to pay the pre-29 July 2022 fees.
How to calculate FIRB fees
Generally, the fee for FIRB application and notice will depend on the consideration paid. The fees increase in consideration tiers (i.e. fee constant) and there are maximum fee caps. For example, in respect of foreign land acquisitions:
The fee constant for:
• Residential land is $1 million;
• Agricultural land is $2 million; and
• Commercial land is $50 million.
For example, the current FIRB fee for single action in respect of the acquisition of $85m agricultural land is $522,500. From 29 July 2022, the fees will increase to $1,045,000.
For further reading on the updated fees on foreign investment applications, please refer to FIRB’s Guidance Notes 10 here. Page 42 of that document provides the fee schedule for single actions and exemption certificates. The previous version of the Guidance Notes 10 (noting current fees) can also be accessed here.