By Rhett Oliver, Brendan Maier, Anita White and Ben Wu

The Strengthening Australia's Foreign Investment Framework options paper, released in February 2015, outlines proposed changes to the government's foreign investment policy. Property developers and foreign investors in Australia's agribusiness sector will be affected. 

Property developers seeking an advanced off-the-plan certificate will pay an application fee based on the number of dwellings sold to foreign investors. Timing for payment is unclear, as is whether it will be calculated on the value of each individual apartment or the aggregate value of the development. 

Developers will be unable to sell more than $3 million worth of apartments in any one development to a foreign person, even with an advanced off-the-plan certificate. Anything above this value would require individual approval.

Civil and criminal penalties will be introduced for developers who do not market apartments domestically or breach the reporting requirements for advanced off-the-plan certificate approvals.  

From 1 March 2015, the basic investment threshold for acquisitions of rural land requiring the Treasurer's approval will be reduced to $15 million and will be cumulative. Thresholds for non-government foreign investors have been clarified under existing free trade agreements and the proposed China free trade agreement.

A new screening threshold of $55 million for "agribusiness" investment and a broader definition of "agricultural land" have also been proposed.

Until the final nature of the changes is known, prospective foreign purchasers of rural land should ensure that contracts are conditional upon securing any necessary approval under the FIRB regime.