Property developers and other vendors can apply for an exemption certificate to sell new dwellings in a specified development to foreign persons, without each foreign person purchaser being required to seek their own foreign investment approval (similar to what has previously been known as an ‘advanced off-the-plan’ certificate).
Developers (either Australian or foreign) can apply for a new dwelling exemption certificate provided that the development:
- will consist of 50 or more dwellings;
- has development approval from the relevant government authority; and
- if applicable, that foreign investment approval was sought to purchase the land and that any conditions are being met.
Applications for a certificate will be considered on a case-by-case basis to ensure they are not contrary to the national interest.
The certificate, if granted, will normally be approved subject to conditions that the developer:
- provide a copy of the Certificate to each prospective foreign purchaser;
- provide a six monthly report (timing defined by the certificate) of the information requested in the New Dwelling Exemption Certificate and Near-new Dwelling Exemption Certificate reports by:
- ensure that the Development is marketed in Australia.
A Near-New Dwelling Exemption Certificate has been introduced for failed off-the-plan purchases in a development, which allows for developers to sell near-new dwellings in a similar way to new dwellings.
This fix is necessary because the Foreign Acquisitions and Takeovers Act 1975 defines a new dwelling as a property that has not been previously “sold”. A property is considered “sold” once a binding purchase agreement has been entered into regardless of whether the sale is completed (or settled). If a purchase is not completed the dwelling would no longer be covered by the New Dwelling Exemption Certificate as it is not a new dwelling.
A near-new dwelling is a dwelling in a development that has previously been “sold” although the sale was not completed and the developer is entering a new agreement to sell the dwelling.
A person may apply for a Near-New Dwelling Exemption Certificate if some or all of the dwellings in the development are or may be near-new dwellings.