The Foreign Investment Review Board (FIRB) have released new instructions and guidance for property developers on how to apply for a new (or near-new) dwelling exemption certificate. The guidance also outlines property developers obligation to correctly report on the sale of Australian residential property to foreign buyers.
Partner Michael Hansel and Senior Associate Christina Hooper from our Corporate Advisory and Governance practice report. You can find out more about our foreign investment and FIRB compliance expertise, as well as our commercial property team at HopgoodGanim.
Presently, a foreign person (including temporary residents and foreign non-residents) may need to seek FIRB approval or an exemption certificate prior to purchasing property in Australia.
Property developers and other vendors can apply for a new or near-new dwelling exemption certificate. This exemption certificate means that foreign person purchasers do not need to seek their own individual FIRB approval as the Australian properties are covered by the existing certificate.
When seeking to rely on this exemption certificate, consider:
- New dwelling — is a dwelling that is, or will be, built on residential land and has not been previously sold or occupied.
- Near-new dwelling — is a dwelling contained in a development that was previously sold prior to settlement and is to be sold under another agreement.
- Exemption certificate — provides approval for a foreign purchaser to purchase up to AUD$3 million in a single development. If a foreign person wishes to purchase a single dwelling above AUD$3 million or multiple dwelling that in total exceed AUD$3 million, the purchaser must seek their own individual FIRB approval.
Developer eligibility
Developers (either Australian or foreign) can apply for a new (or near-new) dwelling exemption certificate if the development:
- will consist of 50 or more dwellings;
- has development approval from the relevant government authority; and
- has foreign investment approval (if applicable) for purchase of the land the development is on, and any conditions of that approval are being met.
Applications for an exemption certificate will be considered on a case-by-case basis to ensure they are not contrary to Australia's national interest.
Approval Conditions
Approvals for a new (or near-new) dwelling exemption certificate are subject to the developer:
- marketing the dwellings for sale in Australia;
- selling no more than 50% of the total number of dwellings in the development to foreign persons under the certificate;
- selling no more than $3 million worth of dwellings in the development to a single foreign person under the certificate;
- providing a copy of the exemption certificate to each foreign purchaser;
- reporting to the Australian Government, every six months (until all dwellings in the development are sold), on the dwellings sold to foreign persons under the certificate, including the purchaser details and the value of the sales;
- notifying the Australian Government, within 30 days, if the number of dwellings in the development is reduced to less than 50; and
- paying a fee for each dwelling sold under the certificate.
Foreign investment and FIRB compliance expertise
HopgoodGanim is an award-winning Australian law firm with a strong track record of obtaining foreign investment approvals and interacting with the FIRB, as well as a dedicated commercial property team. Our expertise includes providing FIRB legal advice, with FIRB lawyers experienced in FIRB approvals, FIRB applications, negotiating FIRB fees and applying legislation for businesses and investors.
HopgoodGanim can support you and your business with international compliance and foreign investment into Australia. Find out more about our FIRB expertise and connect with Partner Michael Hansel and Senior Associate Christina Hooper in our Corporate Advisory and Governance team for more information.