Tax conditions
The Australian Taxation Office (ATO) has a dedicated team which provides bespoke advice and an overall risk rating to the Treasurer to support informed decision making on foreign investment applications.
Updates to Guidance Note 12: Tax Conditions (GN12)External Link and tax checklist (published in March 2025) provide greater clarity to investors on tax arrangements that will attract greater scrutiny in the foreign investment assessment process. The updated GN12 details specific tax issues of interest and outlines when tax conditions may be imposed.
These documents, in addition to Treasury’s new foreign investment portal, assist to collect more information about individual transactions during the initial phase of the application.
Applicants who are proposing to enter into arrangements assessed as ‘high risk’ from a tax perspective will generally be:
- notified of their high-risk rating
- subject to tax conditions
- subject to follow up or review by the ATO following completion of any proposed action/s.
Ban on foreign purchases of established dwellings
The ATO has implemented the temporary ban on foreign purchases of established dwellings that applies from 1 April 2025. Details of the ban were discussed at the 31 March 2025 meeting.
The ATO has enhanced screening of applications that are exempt from the ban. Additional information gathered in the screening stage will provide assurance that the foreign person is aware of, and will be able to meet, the condition associated with the proposed investment. The enhanced screening may include the ATO asking for details of financing or plans for redevelopment.
In addition, the ATO has adopted a firmer compliance posture in relation to the monitoring and enforcement of development conditions. A comprehensive stocktake and review of all existing approvals with development conditions is currently underway to assess the progress of development, integration with the Register of Foreign Ownership of Australian Assets and compliance with conditions of approval. Where an investor has failed to comply, stronger enforcement action is taken.
Variations to obtain additional time to complete construction will generally not be approved where the delays to construction are within investors' control. Instead, conditions may be imposed to dispose of the asset within 6 months, or compliance action may be undertaken including penalties and civil action.
Register of Foreign Ownership of Australian Assets
The Register of Foreign Ownership of Australian Assets (the register), is administered by the ATO and commenced on 1 July 2023.
As discussed at the 2 December 2024 meeting, the ATO is writing to those with registrations on the previous Residential Land Register that were transferred to the register upon commencement.
Foreign persons acquiring specified assets in Australia have ongoing obligations in relation to the register. The ATO has published guidance including:
- How a foreign person registers a residential property
- How a foreign investor registers non-residential assets.
Additionally, the ATO provided the Foreign Investment Stakeholder Group with tips to avoid common mistakes when accessing the ATO's Online services for foreign investors or registering an asset.
Legislative instrument for extension of time to register interests
The ATO recently consulted on the Draft Legislative Instrument LI 2015/D13 Foreign Acquisitions and Takeovers (Register Notices – Extensions of Time) Instrument 2025.
The Legislative Instrument gives the Commissioner of Taxation the power to provide foreign persons with an extension of time beyond the standard 30 days to meet their reporting obligations in respect of the Registrar of Foreign Ownership of Australian Assets.
The Draft Explanatory Statement LI 2025/D13 contains a non-exhaustive list of factors the ATO would consider in granting an extension, and several sample situations where the Commissioner is likely to grant an extension.
Consultation on the draft legislative instrument is now closed. The instrument is expected to be finalised in October 2025.