The Treasurer has announced changes to Australia’s foreign investment review framework, effective from 10.30pm AEDT on Sunday 29 March 2020, relating to monetary thresholds and timeframes for reviewing applications. Details are available in our Guidance Note number 53, which addresses the effects of the changes. All material on this website should be read in light of the Treasurer’s announcement.

Developers

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:

Failed settlements

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.

Guidance