OIA Property Developers exemption available now
Last week we told you about the new Overseas Investment Amendment Regulations 2018 which come into force on 22 October 2018 (immediately after the Amendment Act).
For more information please see our alert here.
The Regulations triggered the availability of a transitional exemption for developers of large multi-storey apartment buildings, where the developer has already started selling off the plans. Now, the Overseas Investment Office has released further information about the exemption, and an application template.
Provided the developer obtains a Transitional Exemption Certificate (Certificate), and the acquisition by the relevant overseas person complies with the terms of the exemption, a developer will be able to sell dwellings in its development to overseas persons without obtaining OIO consent.
Requirements for exemption
In order for developers to qualify, they must pay the application fee of $25,500.00 and comply with the following requirements:
- The development land must be used or intended to be used for the construction of one or more multi-storeyed buildings as one development. Each building must consist of at least 20 residential dwellings. The exemption can also apply where an existing building is being further developed to add at least 20 or more dwellings.
- The developer must apply for the Certificate before 22 February 2019.
- The Ministers must be satisfied that:
- at least 20 new dwellings (not the entire development) are “likely to be completed” by 22 August 2023; and
- the developer has entered into at least one transaction, for one or more of the new dwellings, before 22 August 2018, in good faith, and in the ordinary course of business.
To determine whether these requirements have been met, the Ministers may look at factors such as the developer’s previous history and financial strength, and whether the necessary other consents for the development have been granted. The template application includes sections requiring the developer to provide financial accounts (audited where possible), details of how they are funding the development, and high level details of their other previous and current developments.
If the Certificate is granted, an overseas person can acquire an interest in one or more dwellings in the development without consent, provided that:
- the relevant land is residential (and not otherwise sensitive);
- the acquisition is from the developer or other person(s) permitted by the Certificate; and
- the acquisition is completed by 22 August 2023.
The Ministers may specify the persons or classes of persons that can be granted the Certificate, keeping in mind the purpose of the exemption is to allow people that are involved in building new dwellings to sell them (as the first disposal) to an overseas person, without consent.
The application template, and further information on the exemption, are available now on the Overseas Investment Office website here.