It has been recently reported that the Australian Tax Office
(ATO) has adopted the position that if a binding
Contract for an 'off-the-plan' dwelling is not able to be
settled, that dwelling will be considered
'second-hand'.
According to news.com.au, a spokeswoman for the ATO cited
subsections 15(4) and (5) of the Foreign Acquisitions and
Takeovers Act 1975 (Cth) (FATA) in explaining
that "a dwelling is considered to be sold when an
agreement becomes binding." She went on to state that
"if a property is on-sold after the date on which the
Contract becomes binding and prior to settlement, then this is
considered to be an established dwelling."
This view was not the 'common sense' approach that many
had thought prevailed, i.e. if a property has just been built and
the title has never changed hands then its status as a
'new' dwelling would not be affected by a failed
settlement.
