A potentially nasty outcome can occur if residential property is bought by a trust that permits distributions to foreign residents, even if that beneficiary is not a primary beneficiary.

Because it is possible for a substantial (or total) of income or capital to be distributed to any one beneficiary, if there are foreign residents who might receive income or capital, the trust may be treated as a foreign trust.

As a result, FIRB approval would be needed to any purchase (at a substantial application fee) and in default of compliance even more substantial penalties might apply.

Before signing contracts to buy land in trusts, advice should be taken on whether they are the appropriate vehicle, whether they should be amended, or whether an application for approval is needed.

The FIRB fact sheet can be found here https://firb.gov.au/sites/firb.gov.au/files/guidance-notes/05_GN_FIRB.pdf