Govt concession for foreign off-the-plan buyers

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'.

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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.

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Government just trying to help their developer mates like Harry Triguboff of Meriton and keep their donations from developers rolling in. It was not that long ago when Harry Triguboff stated the Chinese did not influence the australian real estate / unit market. After the banks did a review of Chinese unit purchases we found that many applicants lied about income, assets etc. Many applications were fraudulent. To avoid a potential explosion of bad debt write off and with ASIC guidance we had to avoid such a situation from occurring by raising lending standards. 50,000 Chinese investors were effected. 20,000 have been able to refinance predominately with other overseas banks but 30,000 have been unable to refinance so far. This would have crippled developers like Harry Triguboff and he publically pleaded to government to assist him as he claimed the australian real estate market would be destroyed. I wonder why he said the Chinese had no influence on the market and then all of a sudden had a change of heart., It comes down to self interest, so government has granted the concessions in the article. It is interesting to note if a local had put down a deposit on a unit and had finance issues they would loose their deposit. A foreign buyer who has committed fraud in obtaining finance here should loose their deposit as they have committed fraud just like what would have to a local buyer Foreign buyers get special treatment under the premise that extra housing will be available for locals which seems to contradict the reality in melbourne and sydney of the numerous ghost towers (unoccupied units) which are never rented thus not assisting with the housing crises. The australian public has been saved from a potential financial disaster in the banking industry thanks to the vigilance of ASIC and the banks. It makes me proud to work for a bank.

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