JV with a non Aust. PR. How to setup?

Discussion in 'Estate Planning' started by extradry, 11th May, 2008.

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  1. extradry

    extradry Member

    25th Apr, 2008
    Adelaide, SA
    Hi guys. Need some advice on this. I'm looking to go into a JV with my sibling, who is a non Aust. PR. Problem with this is, my sibling would not be able to buy established/ old properties as the requirements of the FIRB is foreigners can only buy new properties. However, my sibling is planning to move over here in the future and get an Aust. PR.

    Question: Is there a way for my sibling & I (JV) to invest in established properties now? For instance, setting up a trust? Would that help? Then when he moves here, I can probably move some share of the trust over to him? Does this sound right/ do-able?

    Need your expertise on this. I've been reading up on trusts, but still do not really understand fully. Cheers!

  2. Jacque

    Jacque Well-Known Member Premium Member

    16th Jun, 2005
    Hi Extra

    Taken from the FIRB site's FAQ section:

    Q11. My wife and I are British citizens and we often visit family here. We want to retire next year and live in Australia. Do we need to get FIRB approval to buy a house now? What if we buy jointly with our son and daughter-in-law who are Australians?

    A. Yes. All foreign nationals, unless they have permanent resident status or meet another exemption, need to seek prior FIRB approval before buying a house. Approval will depend on what your current visa status is and the nature of the house you wish to buy. The fact that you may buy jointly with family members does not affect how your proposal will be viewed under policy.

    Q12. I am a foreign national and was recently told that I would not need approval if I bought real estate through an Australian incorporated company or unit trust. Is this true?

    A. No, and moreover, we would like to know the source of such advice so that we can advise them accordingly. Australian incorporated companies or trusts where 15 per cent or more of the shares or units are beneficially held by foreign persons are themselves considered to be "foreign" under the Act and policy. It is wise to talk to us about particular structures before making any offers on property.

    It appears that purchasing in a trust is not going to assist at all, as they are basically treated the same way as if you were buying in personal names.

    Do you really need to purchase with this sibling? JV's can be very restrictive and cause all sorts of problems- biggest one being joint and several liability on any loan you take out.