Exemption certificates for property developers

About exemption certificates for property developers

Property developers and other vendors who have a multiple new or near-new dwellings in a development, can apply for a New or near-new dwelling exemption certificate to sell to a foreign person or investors.

A property developer can apply for a:

• new and near-new dwelling exemption certificate
• near-new dwelling exemption certificate only
• near-new dwelling exemption certificate related to an advanced off the plan certificate.

If you are a developer and obtain an exemption certificate for a new or near-new dwelling, it means that your foreign buyer will not need to apply for foreign investment approvals for the property/properties covered by your exemption certificate.

If you are a foreign person and are buying a new or near-new dwelling from a developer who has a New or near-new dwelling exemption certificate, you do not need to apply for approval to buy the property/properties.

The developer's exemption certificate provides approval for a foreign person to purchase a single or multiple dwellings within the development, up to the value of $3 million.

For purchases over $3 million, the foreign person must apply for their own foreign investment approval. See Apply to buy residential property as a foreign person.

What is a new dwelling?

A new dwelling is a dwelling (except commercial residential premises) that is all the following:

• is being, will be or has been built on residential land
• has not been previously sold as a dwelling
• has not previously been occupied.

A near-new dwelling is a dwelling that is all of the following:

• will be, is being, or has been, built on residential land
• is part of a residential development
• was previously sold by the developer, but the transaction ultimately failed to settle
• has not been previously occupied for more than 12 months in total.

A residential development is one or more multi-story buildings containing at least 50 self-contained dwellings (other than townhouses) under one development approval.

More guidance is available at the Foreign InvestmentExternal Link website.

Conditions a developer must meet

Developers (Australian or foreign) can apply for a New or near-new dwelling exemption certificate if the development they are proposing has all the following:

• 50 or more dwellings
• development approval from the relevant government authority
• foreign investment approval (if applicable) for purchase of the land the development is on, and any conditions of that approval are being met.

All applicants must:

• market the dwellings for sale in Australia
• sell no more than 50% of the total number of dwellings in the development to foreign persons under the exemption certificate
• sell no more than $3 million worth of dwellings in the development to a single foreign person under the exemption certificate
• provide a copy of the exemption certificate to each foreign purchaser
• report to us
  • every 6 months until all dwellings in the development are sold
  • on the dwellings sold to foreign persons under the exemption certificate, including the purchaser details and the value of the sales
• notify us, within 30 days, if the number of dwellings in the development is reduced to less than 50
• pay a fee for each dwelling sold under the exemption certificate.

Developers applying for an exemption certificate

Property developers should apply for an exemption certificate using Online services for foreign investorsExternal Link and:

1. Select either
   • Lodgment menu, then Residential application
   • Lodge or pay residential application quick link.
2. At Application type select New and near-new dwelling exemption.

For more information on how to complete the application online, see Apply to buy residential property as a foreign person.

Log in to Online services for foreign investors

Fees for developer exemption certificates

The developer must pay a feeExternal Link when applying for an exemption certificate.

If the exemption certificate is granted, the developer will need to both:

• report your sales
• pay a separate fee per sale for each dwelling sold to a foreign person under the exemption certificate.

You must pay these fees within 30 days of the end of each 6-month reporting period the sale has been made, until all dwellings covered by the exemption certificate are sold.

How developers report sales

Once you have been granted an exemption, developers must report their sales every 6 months, until all dwellings covered by the exemption certificate are sold. The 6-month reporting period starts from the date the exemption certificate was approved. You need to use the prescribed template, Sales report – New or near-new dwelling exemption certificate. This service is currently not available in Online services for foreign investors.

The sale of new dwellings and near-new dwellings needs to be reported using the approval number for the development covered in the exemption certificate.

To meet the reporting requirements, developers must:

• report every 6 months on the prescribed template Sales report – New or near-new dwelling exemption certificate (XLSX, 641KB)This link will download a file using a separate report for each      
  • New or near-new dwelling exemption certificate held
  • 6-month reporting period
• report only for sales
  • that have occurred within the 6-month reporting period
  • where the sale contract has become binding (regardless of whether termination later occurred)
• pay the fee per sale in the reporting period, within 30 days of the end of the reporting period
• lodge the report by email using the instructions in spreadsheet within 30 days of the end of the 6-month reporting period.

Note: You should be aware that the internet is not a secure environment. We can’t guarantee the privacy of personal information sent by email. You should be aware of this risk if you choose to communicate with us by email and include any personal or sensitive information.

Start your sales report

Information you need to complete the sales report

You will need the following information to complete the sales report.

It's important to complete each field in the report. Ensure you scroll across the report for all fields.

Details must match those on the exemption certificate approval.

At Developer details, type:

• foreign investment approval number
• date of approval – the date the exemption certificate approval was given
• name of developer
• name of development
• period this report covers, using the format DD/MM/YYYY – this is the 6-month reporting period being covered for sales made in the development
• date of report the date you complete the report
• report number for development, if
  • this is the first report, type '1'
  • previous sales reports have been submitted for the development. It is the next number after the last report
• Do any NNDEC sales reported relate to an advance off the plan certificate issued before 1 December 2015? – Answer 'Yes', 'No' or 'Not applicable'.

At Purchaser details, type:

• first, middle and family name
• date of birth, in the format DD/MM/YYYY
• company or trust name, or NA if not applicable
• Australian business number (ABN) or NA if you don't have one
• nationality
• email address.

At Purchasers address, type:

• current address – number and street name
• locality – suburb, town or locality
• Australian state or territory is mandatory for an Australian address
• postcode is mandatory for an Australian address
• country is mandatory if not an Australian address.

At Dwelling being purchased, type:

• building name – if applicable
• address, full address including post code
• lot or block
• plan or section.

At Purchase information, type:

• the ownership, either
  • tenants in common, and list each tenant in common separately for each dwelling sold with the percentage of ownership
  • joint tenants, and list each joint tenant separately for each dwelling sold
  • sole purchaser, and list each sale separately
  • sole purchaser who is a company or trust, list the full details of the shareholders or beneficiaries with the majority shareholding for each dwelling sold
• purchase price – sale price of the dwelling
• date contract for sale becomes binding in the format DD/MM/YYYY
• NDEC (new dwelling) or NNDEC (new or near new dwelling).

At Fee per sale, type the fee payable.

Date contract for sale becomes binding

Only report sales where the contract becomes binding even if termination later occurs.

A contract will become binding when the parties cannot get out of the contract unless they terminate, or default on the contract provisions. The interest is acquired on the date that the contract is binding, which is usually when all conditions are met.

For more information is available at the Foreign InvestmentExternal Link website.

Fees per sale

When you apply for the exemption certificate, you will be issued with an 18-digit payment reference number (PRN) to pay your exemption certificate application fee.

You must use the same PRN to pay the fees for each sale of property covered by the exemption certificate, for the relevant reporting period. If your foreign buyer has agreed to pay this fee directly to us, they will need the PRN as the reference for the payment.

Fees are due within 30 days of the end of the relevant 6-month reporting period.

If more than one buyer is purchasing the property as:

• joint tenants – there will only be a single fee payable for the jointly-owned dwelling, calculated on the total sale value
• tenants in common – each tenant in common is liable to pay a fee proportional to their interest in the property.

You must calculate the amount of fee payable for each dwelling sold under the exemption certificate, to include in your sales report.

For more guidance on fees and how to calculate fees, see:

• Residential fees for a foreign person
• the Foreign InvestmentExternal Link website.

Changing your sales report

If you want to change any of the information reported on the schedule after you've lodged it, you'll need to lodge another report.

Penalties for developers who fail to comply

Property developers who don't comply with the conditions on the New or near-new dwelling exemption certificate may be subject to strict penalties, including civil and criminal penalties and revocation of your exemption certificate.

Examples of not complying with your reporting conditions include:

• failing to lodge your 6-monthly report on time
• incorrectly reporting the sales made in each 6-monthly report
• not paying the correct fee for each dwelling sold under the exemption certificate.

If you have not complied with your foreign investment conditions, contact us as soon as possible.

Cases of non-compliance with Australia’s foreign investment framework may also be brought to the attention of law enforcement agencies, and other Australian Government departments, such as the Department of Home Affairs.

If you suspect someone else may have breached the foreign investment rules, you can confidentially report a breach to us, either online or by phone.

Get help lodging your application or reporting sales

If you need help to complete or lodge your application or your 6-monthly sales report, you can contact us.