Federal Budget 2017 – Changes to foreign investment framework

A number of changes to the foreign investment framework have been announced in the 2017-2018 Federal Budget.

These changes include:

• a 50 per cent cap on the total amount of dwellings a developer can sell to foreign persons under a New Dwelling Exemption Certificate (NDEC); and
• the introduction of an annual vacancy charge.

50 per cent cap for NDECs

Foreign or Australian developers can apply for a NDEC for developments of more than 50 dwellings. A NDEC will generally allow the sale of the dwellings to foreign residents without the need for individual foreign investors to seek foreign investment approval up to a cumulative total of $3 million in the development. A foreign person who intends to purchase interests in the development in excess of $3 million will need to seek individual foreign investment approval to do so.