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An industry body has said the changes to the policy are “most welcome news” and will benefit other investors in off-the-plan property.
The Real Estate Institute of Australia (REIA) has welcomed changes announced by the government which will allow foreign investors to purchase off-the-plan properties if another foreign buyer has failed to reach settlement.
Prior to these changes, foreign buyers were not able to purchase off-the-plan property in such circumstances as it was considered second-hand sale; foreign investors are only allowed to purchase new dwellings.
“This is most welcome news and will minimise the negative impact of off-the-plan sales to foreign purchasers not being completed,” said Neville Sanders, president of the REIA.
The REIA approached the government with these concerns in October, and has praised the quick turnaround on these changes.
The new policy will lessen the chance that investors in off-the-plan developments will experience issues due to developers being unable to resell properties originally sold to foreign investors.
The changes have come into place immediately and further regulation changes will soon be made which will enable developers to acquire New Dwelling Exemption Certificates for the foreign investors of these recycled off-the-plan properties.
“By eliminating an element of risk, this change will encourage developers to continue to add to the supply of housing which is much needed and the intent of the FIRB arrangements,” said Mr Sanders.
"The government has addressed an anomaly in the FIRB rules in a pragmatic way. It is a common sense approach to not treat a dwelling that has just been built and for which the title has not changed as an established dwelling,” he said.
Property refers to either a tangible or intangible item that an individual or business has legal rights or ownership of, such as houses, cars, stocks or bond certificates.