The Foreign Investment Review Board (FIRB) announced yesterday that it has reversed its decision to reduce normal monetary thresholds in relation to material variations and renewals of leases of existing non-sensitive leasehold interests in developed commercial land. The changes take effect from today (4 September 2020) and mean that FIRB approval will no longer be required for renewals or material variations of leases where the tenant held a substantially similar interest under the relevant lease prior to 10:30pm on 29 March 2020, unless: The tenant is a foreign government investor The acquisition value exceeds AU$1,192 million and the land is being acquired by a foreign person who is an agreement country (US, NZ, Chile, Japan, Republic of Korea, China, Singapore, Peru, Canada, Mexico, Vietnam, Hong Kong) The acquisition value exceeds AU$275 million and the land is being acquired by any foreign person, other than a country listed in the point above, or a foreign government investor. FIRB approval will continue to be required for: All renewals or material variations of leases of sensitive developed commercial land or agricultural land. Amongst other things, sensitive developed commercial land includes: Land that will be leased to the Commonwealth, a State, a Territory, or a body of these governments (except a number of specific corporate Commonwealth entities) Land that will be fitted out for a sensitive business or a business of providing storage of bulk data Land on which a mining operation operates Land on which public infrastructure is located All new leases or licences for five years or more by foreign persons (including where a tenant acquires a new leasehold interest by way of assignment). Next steps FIRB has released a number of transitional arrangements for those who are affected by the changes, including foreign persons who have previously submitted an application for FIRB approval that is still being processed. Fee refunds are available. Click here to access the guidance note.
