New foreign investment rules give developers more options

10 February 2009

The Federal Governments decision to ease restrictions on foreign investment delivers welcome flexibility to developers at a difficult time, according to the Urban Taskforce.

The Urban Taskforces chief executive, Aaron Gadiel, said foreign investment restrictions had made it impossible to sell an apartment to a foreign investor once it was tenanted.


Until now, developers who tenant newly built homes for six or twelve months have been barred from subsequently selling the property to a foreign investor, he said.


This has forced some developers to leave properties vacant, rather than lose the opportunities to sell to investors without permanent residency.


Mr Gadiel said new rules would give developers more options.


A developer can now choose to hold onto a new home and tenant it for up to 12 months, without losing the right to sell to foreign investors, he said.


Additionally foreign citizens in Australia on a temporary visa will not even have to go through the bureaucracy of seeking formal approval from the Foreign Investment Review Board – once new regulations commence later this month.


Mr Gadiel said a rule barring developers from selling more than half a developments new homes to non-resident foreigners has also been dropped.


While it would be rare for any developer to sell more than half the homes in a new development to foreign investors, this archaic rule sent the wrong message about Australias attitude to international investment.


The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.



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