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.
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.
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.
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.
For more information, please contact our Corporate Advisory and Governance team.