The Government has announced changes to the foreign investment framework which will allow foreign buyers to buy an off-the-plan dwelling when another buyer has failed to reach settlement.
According to Federal Treasurer Scott Morrison, this action would ensure that markets would not be impacted negatively by an increased amount of off-the-plan sales, particularly from foreign buyers.
He explained that the changes addressed industry concerns and would ensure that property developers would not be ‘left in the lurch when a foreign buyer pulled out on an off-the-plan purchase'.
In the event of a failure to complete settlement, the dwelling should revert to its previous status — that was, a new dwelling, he said.
Also, foreign investors who applied to purchase a dwelling that was considered established, only due to a failed settlement, would be assessed as if it was a new dwelling.
"These issues also affect the current New Dwelling Exemption Certificates, which act as a pre-approval mechanism for foreign persons purchasing new apartments in a specific development," he said.
"A regulation change will be made at the next opportunity to enable developers to acquire a certificate that covers foreign persons purchasing a dwelling that is considered established only due to a failed settlement."
Morrison said that the Government's strong foreign investment framework allowed foreign persons to purchase Australian dwellings to encourage developers to build more houses and apartments as an increased supply would make housing more affordable for more Australians.