There are two types of residential property exemption certificates which will not require a foreign person to have to obtain FIRB approval for a particular property. These are:
- a New (or Near New) Dwelling Exemption Certificate; and
- a land exemption certificate.
For the purpose of this blog, we will focus on a New (or Near New) Dwelling Exemption Certificate.
Please refer to our previous blog to find out what a New (or Near New) Dwelling is.
What is a New (or Near New) Dwelling Exemption Certificate?
A New (or Near New) Dwelling Exemption Certificate is one which obtained by the seller (usually a developer who is either Australian or foreign) so that none of the foreign buyers, who are purchasing within a particular development, need to obtain their own individual FIRB approval, making the process faster and generally saving the buyers money and time.
A developer is also able to apply for a streamlined bulk approval process, which means that the developer can apply for FIRB approval as an agent for each foreign buyer and these applications will be streamlined and not take as long as a normal application a buyer would make separately. This is usually obtained by a developer who meets the requirements of the exemption certificate, but may have strong compliance history also.
What are the conditions for the grant of a New (or Near New) Dwelling Exemption Certificate?
The development needs to meet certain criteria to be eligible for a New (or Near New) Dwelling Exemption Certificate, and of course these vary depending on the circumstances of each application, however some of the main criteria are:
- the development will need to have fifty (50) or more dwellings (other than townhouses);
- there must already be development approval in place from the relevant government authority; and
- if the developer is foreign, FIRB approval was given to purchase that land and all the conditions upon which that approval was given, were/are complied with by the developer.
What are the approval conditions granted once a New (or Near New) Dwelling Exemption Certificate is approved?
Like all other approvals granted by the Foreign Investment Review Board, there are conditions the applicant/developer must comply with and some of these are:
- that the developer market that development in Australia;
- that the developer only sell 50 per cent or less of the total number of dwellings to foreign buyers with that particular certificate;
- that the developer does not seller more than $3,000,000.00 worth to a single buyer in that development;
- the developer must provide a copy of the received certificate to each foreign buyer;
- the developer must provide the relevant reports to the Government every six months in relation to the dwellings sold to the foreign buyers (until all dwellings in the development are sold),
- the developer must notify the Government, within 30 days, if the number of dwellings in the development is reduced to less than 50; and
- paying the relevant fee for each dwelling sold under the certificate, which can sometimes be passed onto the foreign buyer, depending on the agreement between the buyer and seller.
Do you need to know if you have to make an FIRB application or if you can rely on the seller’s New (or Near New) Dwelling Exemption Certificate?
If you are unsure as to whether or not you are required to obtain FIRB approval, or you are a developer who is looking to obtain a New (or Near New) Dwelling Exemption Certificate, you may specialised team of property lawyers, immigration lawyers and registered migration agents who regularly act for clients to advise on or obtain FIRB approval.
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