&nbsp;

A local Australian has spent a Lower North Shore record $15.1 million at <a href="https://www.apartments.com.au/new-apartments/elevate-hume-place-crows-nest-25-hume-street-crows-nest-nsw-2065">Elevate Hume Place</a>, the new TOD above the recently opened Crows Nest Metro Station.

The buyer amalgamated a penthouse and sub-penthouse to create the triplex apartment that will have five bedrooms, five bathrooms, a private rooftop pool, expansive terrace, and panoramic views of Sydney Harbour and skyline. The building is being created by burgeoning developer Third.i, alongside joint venture partner Phoenix Property Investors.

The buyer was drawn to Elevate’s unrivalled connectivity, situated directly above the&nbsp;<a href="https://www.apartments.com.au/developments/crows-nest-nsw-2065">Crows Nest</a> Metro Station, and the vibrant lifestyle precinct that surrounds it. The Metro connects to the CBD in just seven minutes, and Chatswood in four.

[smartcode_project:default project_id=142550 project_image_fid=309367]

Designed by internationally acclaimed architects <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a>, Elevate draws inspiration from the ancient blue gum forests native to the area. The building is a Net Zero development, created in consultation with Indigenous communities and exceeding sustainability benchmarks. Interiors feature chevron-engineered timber flooring, natural stone benchtops, and premium Sub-Zero Wolf appliances, delivering timeless elegance and next-level comfort.

The exchange of the $15.1 million apartment, follows a recent $5 million sale, and over $30 million currently in expressions of interests. Interest in Elevate’s penthouse stock has surged, reflecting a strong appetite for ultra-luxury residences that combine design excellence with unmatched connectivity.

[smartcode_project:default project_id=142550 project_image_fid=309369]

“We’re seeing a significant uptick in interest from local and international buyers who are prioritising connectivity, sustainability, and lifestyle,” said Callum Billinghurst, Head of Sales at Third.i Group.&nbsp;

“These recent sales are a testament to the vision behind Elevate. It’s not just about luxury finishes or panoramic views, it’s about creating homes that are deeply connected to the city and the community. Buyers are responding to that. They want to live somewhere that offers more than just a postcode, they want culture, convenience, and long-term value. Elevate delivers all of that, and more.”

[smartcode_project:default project_id=142550 project_image_fid=297878]

As part of the Hume Place precinct, Elevate is transforming Crows Nest into Sydney’s most dynamic urban village. Elevate’s unique position directly above the metro, combined with its curated amenity offering, has made it a magnet for buyers seeking a future-proof investment and a vibrant urban lifestyle.

The next release at Elevate is expected later this year.

[smartcode_project_cta:default project_id=142550]

“We’re seeing a significant uptick in interest from local and international buyers who are prioritising connectivity, sustainability, and lifestyle,” said Callum Billinghurst, Head of Sales at Third.i Group


Joel Robinson

Third.i & PPI set Lower North Shore apartment record with $15.1m sale at Elevate Hume Place penthouse amalgamation

Sydney developer Deicorp is set to officially open its <a href="https://www.apartments.com.au/new-apartments/hills-showground-village-castle-hill-2-mandala-parade-castle-hill-nsw-2154">Showground Village</a> precinct in Castle Hill.

NSW Premier Chris Minns will attend the opening on Sunday August 31, alongside&nbsp;Minister for Planning and Public Spaces Paul Scully, The Hills Shire Council Mayor Dr Michelle Byrne, Landcom CEO Alex Wendler, and Deicorp Founder Fouad Deiri.

Located just moments from Hills Showground Metro Station, the centre spans 9,500 sqm across four levels and features 26 specialty retailers as well as a 1,400 sqm public plaza, creating a new community meeting point for shopping, dining, fitness, and everyday convenience.&nbsp;

Showground Village forms part of the Hills Showground Station Precinct, an urban renewal initiative led by Landcom and Sydney Metro that will provide for around 2,300 new jobs over the next 20 years and around 9,000 new homes.&nbsp;

Deicorp was recently approved for another new development next door to Showground Village.

The new five residential buildings in the East Showgrounds Precinct, will see another 873 dwellings delivered, as well as&nbsp;3,500 sqm of open public space in the form of landscaped courtyards, a public park and communal outdoor recreational space including a playground, barbeque area, and outdoor seating.

“This approval will allow us to start construction on a range of beautifully designed, conveniently located apartments and create another vibrant, walkable and well-connected community,” said&nbsp;<a href="https://www.apartments.com.au/developers/deicorp" target="">Deicorp</a>&nbsp;Founder Fouad Deiri.

“These new homes will provide their residents with a seamless connection to jobs and services along Metro North West, and the new&nbsp;<a href="https://www.apartments.com.au/new-apartments/hills-showground-village-castle-hill-2-mandala-parade-castle-hill" target="">Hills Showground Village</a>&nbsp;retail precinct currently under construction."

Deicorp has several thousand apartments in planning and under construction across Sydney, from Zetland and Five Dock to Crows Nest and Macquarie Park.

[smartcode_project_cta:default project_id=133881]

Deicorp, NSW Premier officially open Showground Village, new retail and hospitality hub in Castle Hill

ASX-listed developer Cedar Woods is progressing its plans for its Southbank arts precinct site.&nbsp;

The developer has filed plans, which are now with the&nbsp;Department of Transport and Planning, for a new 20-level tower at&nbsp;<a href="https://www.apartments.com.au/new-apartments/141-151-sturt-street-southbank-vic-3006">141–151 Sturt Street</a>, a 2,718 sqm block opposite the Habitat Filter sculpture.

The proposal seeks to demolish the two-level&nbsp;commercial building, including a small supermarket and medical tenancies, and create a new building with 180 apartments and a focus on an&nbsp;active public realm and arts integration.

&nbsp;

<img alt="Southbank site" data-entity-type="file" data-entity-uuid="76a72db6-91ef-43ae-827d-a9cfa72893d2" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Site.png?VersionId=DZgtB4K6BswVh0QtCs3iLjXaLp0CbcEb" />

&nbsp;

There will be a full mix of apartment configurations, including 28 studio apartments, 16 one-bedroom, 104 two-bedroom, and 32 three-bedroom units.

Retail, creative arts, and residential amenity functions are integrated across the lower levels. A food and drink tenancy is planned to front Dodds Street, while a retail tenancy fronting Sturt Street will be accessed via an elevated walkway. The first floor includes a substantial 734 sqm creative arts space, envisioned to support Melbourne’s growing cultural and digital industries.

Architecture firm <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> has put together the plans. In their&nbsp;Urban Design Report they highlighted the project’s ambition to embed itself within Southbank’s evolving cultural fabric.

A central feature of the design is a through-block link connecting Sturt and Dodds Streets, landscaped with native plantings and embedded with universal access ramps.

“The ramp has been thoughtfully integrated as the primary access point, ensuring universal accessibility for all users,” the report noted, with the link offering “a direct response to the urban planning scheme of creating more green spaces within our communities”.

<img alt="Southbank podium" data-entity-type="file" data-entity-uuid="4d24b1b2-d69c-4a11-a11d-ec6df432221c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/podium.png?VersionId=geWoJyZDmPSLODZ_.PNJ0LvpOmyyCdpo" />

The building’s podium form responds to the mandatory height limits along Dodds Street and maintains a fine-grain interface to adjoining developments. Above the podium, the tower is articulated with recessed balconies and a focus on views toward the CBD and surrounding arts institutions. A communal rooftop recreation deck and indoor lounge are positioned on level four, adjoining seven apartments and providing over 900 sqm of resident amenity space.

Vehicle access and loading will be provided via Dodds Street, with 155 resident car spaces located across two basement levels and the first three above-ground floors. Bicycle storage is more generous, with 226 spaces distributed across resident, staff and visitor needs.

Rothelowman describes the architecture as “humanist,” with ground-level interfaces designed to encourage social interaction and provide a dignified entry for both residents and passers-by. “All street interfaces are crafted to invite and nurture human connections,” the design report states. “The façade transitions to a human scale, providing an approachable and engaging streetscape”.

Cedar Woods, while well-known for its large communities it develops outside of Australia's capital cities, they have recently developed in Melbourne's inner-ring before. They are approaching completion at <a href="https://www.apartments.com.au/new-townhouses/88-leveson-north-melbourne-88-leveson-street-north-melbourne-vic-3051">88 Leveson</a>, just 15 townhouses in the heart of North Melbourne.

Cedar Woods progresses with new apartment plans in Southbank arts precinct

Brisbane developers Core Property Partners and Vector Property Australia has teamed up for Brisbane's newest apartment development.

The duo identified <a href="https://www.apartments.com.au/developments/east-brisbane-qld-4169">East Brisbane</a> as their preferred suburb, on the fringe of the Gabba Precinct, where they've just revealed BANKSII, 72 apartments opposite Raymond Park.

[smartcode_project:default project_id=136432 project_image_fid=5481]

The one-, two-, and three-bedroom apartments will sit in a glass-wrapped building that will also feature a rooftop with an&nbsp;infinity-edge pool, a BBQ area and alfresco dining spaces, sun lounges, and a sauna, as well as a resident-only gym and a ground-floor cafe.

Rhett Williams, Director of Vector Property Australia, said the project will lift the quality of the East Brisbane community and set a new benchmark.

"In Brisbane’s current property landscape, <a href="https://www.apartments.com.au/new-apartments/banksii-east-brisbane-169-wellington-road-east-brisbane-qld-4169">BANKSII</a> stands out through its emphasis on lifestyle-oriented living, connectivity and sophisticated design," Williams says.

[smartcode_project:default project_id=136432 project_image_fid=5479]

The 10-level building has been designed by MAS Architecture. Their designs were inspired by the native Banksia flower, with the architecture and interiors reflecting the organic symmetry of its namesake flora. MAS has interpreted this throughout the building’s curved form, façade detailing and interior palette.&nbsp;

The building’s flowing geometry and natural tones are complemented by large balconies and floor-to-ceiling glazing, maximising cross-breezes, daylight and views over the city, parklands and river.

“Having a strong narrative for a building helps us architecturally,” MAS noted. "We can choose colours that come off that species of flowers. The trunk and the trees and the flower elements all are now visible in our joinery on the inside and in our architectural finishes on the outside."

[smartcode_project:default project_id=136432 project_image_fid=5485]

Apartments will feature timber floors, soft porcelain tiles, brushed bronze fittings, and stone benchtops with warm veining.&nbsp;

Kitchens feature premium SMEG appliances and generous storage, while bathrooms have been designed as calming retreats with curved cabinetry and twin sinks in the master ensuites.

The building will feature a suite of rooftop and wellness amenities. Residents will have access to an infinity-edge pool, BBQ and alfresco dining areas, sun lounges and a rooftop sauna.&nbsp;

A residents-only gym will be located on the podium level, while a ground-floor café and landscaped laneway will further activate the site and improve neighbourhood connectivity.

[smartcode_project:default project_id=136432 project_image_fid=5488]

BANKSII will rise from a prime Wellington Road site, with the building oriented to overlook the adjacent Raymond Park and take in extensive city views. It is also on the doorstep of key&nbsp;lifestyle infrastructure, including the future Kangaroo Point Green Bridge, The Gabba stadium, and the planned Brisbane Live arena.&nbsp;

Public transport options, including ferry, bus and rail - including the future Cross River Rail Woolloongabba station - are all nearby, supporting a car-optional lifestyle just minutes from the CBD.

Williams said the team spent over a year searching for the ideal site before securing this location.

"We were attracted to <a href="https://www.apartments.com.au/developments/east-brisbane-qld-4169">East Brisbane</a> as it is a vibrant and growing community that offers a perfect balance of urban convenience and natural beauty with the parklands and river on our doorstep.”

The project is part of the broader Woolloongabba Games precinct, which is undergoing significant investment in the lead-up to the 2032 Brisbane Olympics. This urban renewal, coupled with infrastructure upgrades, is expected to enhance long-term liveability and capital growth in the area.

Given the wide max of configurations, BANKSII is expected to suit everyone from first home buyers and investors to families and downsizers.

[smartcode_project_cta:default project_id=136432]

BANKSII sales launch in booming East Brisbane apartment market

The Minns Labor Government will deliver Sydney’s first new heavy rail station in more than a decade – enabling up to 10,000 new homes by rezoning land around Woollahra and Edgecliff stations, right next to the CBD, to tackle the housing crisis and rebalance growth across the city.

Recent reports by the NSW Productivity Commission have warned that Sydney is losing twice as many young people as it is gaining, while also finding that Woollahra is the most feasible Local Government Area (LGA) in New South Wales to build new housing.

Despite this, housing approvals in Woollahra consistently lag well behind other LGAs, and the population has declined by 11 per cent over the past 50 years while Greater Sydney as a whole has grown by 74 per cent.

The new station that will be an eight-minute trip from Sydney CBD, will be located on the Eastern Suburbs train line in Woollahra, where a station build was started in the 1970s but never completed.

To enable the delivery of new homes the NSW Government will lead a rezoning of Woollahra and Edgecliff stations similar to other state led rezonings to allow additional homes to be built around the stations.

Affordable housing will also make up a proportion of development on the site with the final amount of affordable housing required, to be determined as part of the rezoning process.

The area surrounding the new station is within walking distance of major green and recreational space including Cooper, Trumper, Rushcutters Bay and Centennial Parks.

The Eastern Suburbs train line between Bondi Junction and Sydney CBD also has the lowest passenger usage rates during the AM peak of any line on the Sydney network, with only 43 per cent of operating capacity during the AM peak currently being utilised by passengers.

Sydney Water and Infrastructure NSW have confirmed there is capacity in the water and wastewater systems to accommodate the proposed 10,000 dwellings without major upgrades.

The rezoning is expected to take around two years and will further support the Government’s housing targets that rebalance the delivery of new homes around existing infrastructure.

&nbsp;

&nbsp;

Next stop Woollahra train station - delivering up to 10,000 new homes in the heart of Sydney

Foreign Investors

The ASX-listed ASF Group have released the final opportunity to buy in their unrepeatable gated Hope Island community, The Peninsula.

Peninsula Collection&nbsp;is the final instalment of apartments in the master-planned development on Harbourview Drive, which is located in the highly sought-after Hope Island Resort.

ASF has already sold out Peninsula Homes, a collection of 17 townhouses, Peninsula Residences, comprising&nbsp;40&nbsp;apartments, and Peninsula Terraces, just 22 terraces, which sit along side the Peninsula Collection.

The Peninsula Collection has 63 apartments, starting from a low $565,000 for the three-bedroom apartments. Since the official launch of Peninsula Collection last month, more than 10 apartments have already been snapped up

[smartcode_project:default project_id=22034 project_image_fid=170599]

They&#39;re likely to be popular with investors, particularly&nbsp;internationally, with Hope Island Resort featuring Foreign Investment Review Board (FIRB) exemption. This gives investors a global re-sale market for future capital returns seldom found in other developments in Australia.

The project is also&nbsp;offering a three-year rental guarantee of five per cent&nbsp;per annum, along with the option for&nbsp;property management services.

Hope Island apartments&nbsp;have seen 3.8&nbsp;per cent price growth per annum over the past 10 years, according to SQM Research. In the last 12 months, apartments have seen&nbsp;16.5 per cent growth.

This can be attributed to a number of factors, not least of which is shortage of supply.&nbsp;According to property consultants Urbis in 2019, The North Shore precinct, which includes Hope Island, was the most undersupplied market on the Gold Coast for apartment buyers. A situation which hasn&#39;t see much improvement until recently with five&nbsp;new apartment developments set for Hope Island.

Rental stock has also remained extremely tight on Hope Island.

The&nbsp;2032 Brisbane Olympics announcement is also backing up this data, ensuring&nbsp;investment from both private and public sectors&nbsp;upwards of hundreds of millions of dollars in infrastructure and more&nbsp;in the near and long term.

[smartcode_project:default project_id=22034 project_image_fid=172301]

Three-bedroom apartments in Peninsula start&nbsp;from $565,000,&nbsp;below the&nbsp;suburb median of $579,000, according to SQM.

Rents have also been on the rise with rental asking prices up 24.8 per cent&nbsp;in the past year and 4.4 per cent per annum for the past 10 years.

&#39;The Peninsula, as an exclusive gated community development on Hope Island Resort&#39;s unique river canal, is located within&nbsp;one kilometre of three golf courses, across the road from the Azzura Greens Resort and&nbsp;Links Hope Island Golf Club.

It&#39;s one of the closest new developments near the Hope Island Shopping Centre, reachable on buggy or foot.

[smartcode_project_cta: project_id=22034]

The Peninsula Collection has 63 apartments, starting from a low $565,000 for the three-bedroom apartments

jordan_55689

Hope Island's Peninsula Collection apartments show great appeal to interstate and international investors

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GUEST OBSERVER
As expected, a range of housing policy measures were introduced in the Budget, including but not limited to:
-National Affordable Housing Agreement providing $1.3 billion of funding per annum to the States to help meet supply targets;
-A $1 billion National Housing Infrastructure Facility;
-A new suburb for Melbourne, with 6,000 homes to be unlocked 10km from the CBD at Maribyrnong (which is not an easy thing to say late at night);
-Managed Investment Trusts to invest in affordable housing, with a 60 per cent capital gains tax discount to invest in this sector;
-Extension of homelessness funding to the States;
-Encouraging downsizing by allowing a non-concessional contribution to made into superannuation for the over 65s up to $300,000;
-First home buyers will be allowed to save for a deposit by salary sacrificing into their superannuation account, though contributions will be capped at just $30,000 per person, and $15,000 per year;
-A Foreign Investment Levy of at least $5,000 on all future foreign investors who fail to either occupy or lease their property for at least six months each year; and
-A reinstated requirement that prevents developers from selling more than 50 per cent of new developments to foreign investors.
There were other measures too, including increasing APRA's powers to control the non-ADI sector, zoning reform, and land release.
Each of these points deserves detailed market analysis in its own right, but today I'll just take a look at the least well understood new policy, which I believe will be significant. 
Negative gearing sideswiped
Instead of quarantining negative gearing deductions to new dwellings as proposed by the Australian Labor Party (ALP), the Treasurer has targeted the following areas of deductions prospectively:
Travel expenses will now be disallowed for investment properties, which is mildly annoying for landlords with plans for investment properties at Port Douglas - there is no longer an incentive for politicians to buy an investment home in their favourite holiday destinations! - but broadly a sensible move which improves the integrity of negative gearing legislation. 
More pertinently, for investment properties bought after 7.30pm yesterday, the Government will also limit previously generous plant and equipment depreciation deductions to only those expenses directly incurred by investors.
<a href="https://www.propertyobserver.com.au/images/2017/05/14/NG.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/14/NG.jpg" alt="">
What this means
Firstly this is a cruel impact for the Quantity Surveyor industry, hundreds or perhaps thousands of whom will wake up today only to discover they have very little to do. These businesses will need to pivot immediately towards new and commercial properties, though competition here will be fierce.
As for investors, going forward landlords purchasing established property will only be able to claim plant and equipment depreciation deductions on assets they have purchased themselves, while buyers of newly constructed dwellings will still be able to make a depreciation claim on plant and equipment. 
Landlords will still be able to claim deductions on the construction component (Division 43, for the building's structure) of the dwelling over 40 years for properties built after September 1987.
The ruling is evidently designed to restrict 'double-dipping' whereby multiple claimants received deductions on the residual value of the existing assets, such as air conditioning, heaters, carpets, televisions, dishwashers, alarm systems, hot water systems, and so on. 
In practical terms, about half of deductions would typically have been claimed for plant and equipment items on established property in the first year of claim, though this really depends upon the age and type of dwelling in question.  
Copied below are just a few examples of Sydney properties bought about a decade ago. As you can see with plant depreciation disallowed on established properties the difference to deductions in the early years of ownership would have been quite substantial, though there is no impact of landlords already in the market.
<a href="https://www.propertyobserver.com.au/images/2017/05/14/DEDUCT2.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/14/DEDUCT2.jpg" alt="">
Data compiled by MCG Quantity Surveyors showed that their average claim for depreciation deductions was $9,138, up to half of which was typically for plant and equipment deductions. 
For new individual Mum-and Dad investors - which is most of the landlord market - this is a fairly significant change to tax legislation. 
Market impacts
As always investors will try to find a way around the rules, such as by purchasing chattels off-contract, though presumably the tax office would scope out such a move through an ATO Interpretative Decision (ID) if the practice became widespread.
Overall, it may become more tax-efficient to purchase older style properties in order to renovate them, though for properties built before 1987 the building works component would already be fully depreciated over 40 years. 
Somewhat ironically these changes will may create a divide between the perceived value of new and established properties in the eyes of investors, effectively creating a 'second-hand market' (which is what the Treasurer previously accused the ALP of doing with its own negative gearing proposals). 
Some domestic investors may be inclined to steer clear of new properties for this reason, in turn hurting building approvals and dwelling starts, at least while the dust settles.  
Ultimately what these changes will mean is that rental returns on established property in the lowest-yielding cities of Sydney and Melbourne will have to increase in aggregate, either through higher rents or through lower prices (or, most likely, a combination of the two).
I'll take a look at the wider impact of the Budget next up. 
PETE WARGENT is the co-founder of <a href="https://allenwargent.com/">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/">blogger</a>.
His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx">Four Green Houses and a Red Hotel</a>.
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pwargent-M4siyDbqQY

Budget takes sideswipe at negative gearing: Pete Wargent

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GUEST OBSERVER
Since October 2016, all foreign buyers and developers are subject to a 3% stamp duty surcharge on the acquisition of residential property in Queensland known as Additional Foreign Acquirer Duty (AFAD). The Commissioner has now updated conditions under which ex gratia relief from AFAD can be sought.
This relief is available to foreign persons, as defined in the Duties Act 2001, carrying out ‘significant’ residential development. Relief from AFAD may be granted by the Commissioner on a case-by-case basis. Foreign Persons must also meet regulatory requirements such as complying with the Corporations Act 2001 and complying with Queensland taxation laws. AFAD will only apply to the acquisition of residential land in Queensland by those who are either: 
<ul>
<li>a foreign individual - individuals without Australian citizenship or permanent residents (permanent residents include New Zealanders with either permanent visas or special category visas both defined by the Migration Act 1958 (Cth); </li>
<li>a foreign corporation - companies incorporated outside Australia, or Australian companies where at least 50% interest is with a foreign person/s or related person/s (ie relatives/spouse or partners in a partnership); or </li>
<li>a trust where at least 50% of its interests are held by a foreign person/s. </li>
</ul>
RESIDENTIAL LAND
“Residential land” is land that is or will be solely or primarily used for residential purposes. This includes established houses and apartments, vacant land where a home or apartment will be built, land for development for residential use (ie smaller unit block developments, housing subdivisions, and major developments with a residential component), and/or refurbishment, renovation, or extension of a building for residential use. 
“Residential land” does not include land that will be or is currently used for hotel and motel purposes. 
WHEN EX GRATIA RELIEF CAN APPLY
The Commissioner has announced a number of guidelines and conditions that will be taken into account when determining whether ex gratia relief from AFAD will be granted.
1. The foreign developer undertaking the transaction must be Australia based: 
In order to satisfy the conditions of AFAD relief, a foreign developer will need to use a range of factors to establish that they are ‘Australian based’, including:  
<ul>
<li>whether the foreign entity has a head office or principal place of business situated in Australia; </li>
<li>if the foreign entity has significant management staff and office presence in Australia; </li>
<li>whether its employees are Australian citizens or permanent residents; </li>
<li>any past business dealings within Australia; </li>
<li>the input that the foreign entity’s Australian management staff and employees have toward the operation of the foreign entity in Australia, and; </li>
<li>whether the foreign entity primarily engages with Australian building contractors and suppliers in construction work. </li>
</ul>
2. The foreign developer will need to have complied with any Foreign Investment Review Board (FIRB) requirements in relation to the acquisition of land.
3. The foreign developer must also meet regulatory requirements, such as complying with the Corporations Act 2001 (Cth) and complying with Queensland taxation laws.
4. The development must be significant, or the developer has significant development status.In order for relief from AFAD to apply, the development being carried out must be established as ‘significant development’. This condition will automatically be met if the foreign developer is commencing development or re-development of 50 or more residential lots.
In instances where fewer than 50 lots are being developed, such as in regional areas, the status of ‘significant development’ can still be established if the foreign developer is able to demonstrate that the development makes a significant contribution to the economy, population and social development of that region.
‘Significant developer’ status will also be satisfied if the developer will undertake development or redevelopment of 50 or more residential lots in a 12-month period or, alternatively, the developer averages 50 or more residential lots per year taken on average over a period of up to five years.
5. The foreign developer must primarily employ or contract Australian building contractors and suppliers to engage in the development. This requires that over 50% of the value paid by the developer for goods and services must be paid to Australian contractors and suppliers, or over 50% of the foreign developer’s employees for the development are Australian.
WHAT DO YOU NEED TO DO?
Foreign investors or developers looking to undertake significant development in Australia are able to apply for ex gratia relief from AFAD through the Commissioner. A statutory declaration must be lodged to the Office of State Revenue detailing the basis on which the foreign developer satisfies conditions for relief along with any supporting evidence.
By submitting a request for relief, a foreign developer will also be acknowledging their obligation to inform the Office of State Revenue within 28 days if it no longer satisfies the conditions for relief.
Paul O'Dea is a partner with ClarkeKann, Brisbane.
You can contact him <a href="mailto:p.odea@clarkekann.com.au" target="_blank">via email</a>.
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j.ballantyne1990-6AQqhLzZaK

Where foreign buyers can seek relief from Queensland's added stamp duty surcharge: Paul O'Dea

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GUEST OBSERVER
An estimated 300,000 vacant dwellings across Australia will be unaffected by the Budget’s new ‘ghost house’ tax on foreign investors which will do nothing to increase housing affordability.
QUT property economist Dr Andrea Blake said Australia’s empty housing stock was an overlooked resource in an era of high demand for affordable housing.
Some inner city apartment developments have more foreign investors (20 percent) than domestic owner occupiers (19 percent).
While I welcome a vacant house levy being applied to foreign investors as a mechanism to support other affordable housing initiatives, this new tax will do nothing to help the current issues.
This levy will affect only applications for foreign investment made after 7.30pm on 9 May 2017 rather than the more than quarter of a million dwellings we have going empty.
The $5k per annum tax is unlikely to deter an overseas investor. The only thing it could do is put more money into the pot for other housing initiatives.
Another issue could be determining that an apartment is vacant and ensuring compliance.
“Foreign investment in inner and near city markets has driven supply and pushed real estate prices up while much-needed rental and housing stock from the market goes empty when we have a severe affordable housing shortage.”
Dr Blake said the impact of foreign investment on property values in the inner Brisbane apartment markets had caused much debate.
 “In markets such as Hamilton and West End we have seen a price drop of up to 30 per cent on apartments bought in 2011," she said.
This is because strong foreign investment has created a two-tier market - prices for off-the-plan sales are undoubtedly linked to foreign investment and would not be sustainable at the volume or prices for the domestic market alone.
Consequently the impact has been felt by the second tier of the two-tier market - domestic buyers.
The reasons foreign investors buy in Australia are varied. For some purchasers it is part of a future lifestyle plan and so the apartments are left unoccupied, and, in many cases, not even furnished.
“These apartments still deteriorate and bring down the value of the other apartments in the complex, causing owner occupiers and those who do rent out their properties some distress.”
Andrea Blake is senior lecturer at Queensland University of Technology [QUT] and can be contacted <a href="https://staff.qut.edu.au/staff/blakea/" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

'Ghost house' tax won't solve housing affordability: Andrea Blake

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Developers who aim projects at foreign investors are facing bleak times under the Budget package.
New developments will be subject to a 50 percent cap on foreign investment off the plan sale approvals to “safeguard the opportunity for Australian buyers to purchase”.
The new regulation applies only to developments with at least 50 units. 
The current level is 100 percent after the Rudd government lifted it from 50 percent during the global financial crisis.
"We will restore the requirement that prevents developers from selling more than 50 percent of new developments to foreign investor," the Treasurer said. 
Meanwhile, foreign investors in residential real estate will be slapped with a “ghost tax” if they leave their properties empty or not available for rent for at least six months of the year.
The annual charge will be equivalent to the foreign investment application fee which was paid at the time of application and will work out to at $5000 plus annually.
The measure is expected to net $20 million in revenue over the next four years.
Earlier in February Property Observer published an article by Robert Simeon where the agent suggested the need to reverse the off-the-plan ratio back to 50 percent from 100 percent to overseas buyers. 
"We are now going into the ninth year of 100 percent and the only clear impact we are seeing is that foreign investors have become a most dominant player," he wrote.
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Reins tightened for developers aiming projects at foreign investors in 2017 Budget

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Citigroup has announced measures targeting overseas investors, including a ban on interest-only loans.
Following recent regulatory guidance, Citigroup has become the first major lender to take the step, according to The Australian Financial Review.
The Australian Prudential Regulatory Authority (APRA) recently announced a 30% cap on interest-only loans as it said the category, which represents nearly 40% of the stock of residential mortgage lending by banks, was "quite high" by international and historical standards. 
The major changes, which were notified to mortgage brokers last week, will be a ban on interest-only loans for:
<ul>
<li>All non-resident loans;</li>
<li>Loans reliant on foreign income;</li>
<li>Loans requiring Foreign Investment Review Board approval; and,</li>
<li>Loans solely with owner-occupied security.</li>
</ul>
"That means, interest-only repayments will only be allowed for resident loans secured by an investment property," Matt Wood, head of mortgages distribution, told mortgage brokers.
Citigroup has only 1% of Australian property market share, but has a high profile across Asia.
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Citi restricts loans to foreign investors in response to regulatory nudge

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The federal Treasury has proposed to streamline the buying of new property by foreign investors.
It says the current set of rules had unintentionally encouraged non-compliance due to its complicated structure.
It also proposes to encourage investment in sectors like retirement living, aged-care and student accommodation.
The consultation paper by the Treasury's Foreign Investment Policy Unit said the December 2015 overhaul of the foreign investment framework – the biggest in 40 years – had unintentionally “incentivised non-compliance" of the rules when it came to buying new residential property, according to a report in the Australian Financial Review.
Under current rules, foreign investors who want to purchase a new dwelling or block of vacant residential land need to apply individually for each property they are considering and pay multiple fees starting from $5000 per application.
To avoid through this cumbersome process, some foreign buyers were choosing to pay a fine and notify after they had purchased the property, rather than apply multiple times in advance, the paper said.
It suggested the introduction of an "new exemption certificate" giving foreign persons "broad pre-approval to purchase one new dwelling or vacant residential block".
Foreign buyers would then be required to notify Australian authorities when an actual purchase was made. 
The report also seeks to amend the treatment of residential land that is used for an aged-care facility, retirement village or student accommodation so that it is considered "non-vacant commercial land" thus lifting the FIRB screening threshold from zero to more than $55 million.
Some in the industry, like Julius Wei, co-founder of BMY Group, which connects Chinese high-net worth investors with opportunities in Australia, said the country was short of supply in these sectors and foreign investment into them "should be welcomed".
But he said the rules needed to incentivise foreign investors to invest for yield rather than capital gain, otherwise there could be a "huge jump in prices".
"Capital gains [in these sectors] should be taxed heavily," he said.
Wei also backed the proposed exemption certificate for individual buyers as according to him it was unfair to pay multiple fees if a buyer only intended to buy one property.
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Treasury plans to simplify rules for foreign property buyers

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GUEST OBSERVER
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Federal government plans to restrict foreigners from buying more than half the homes or apartments in any new development will only discourage offshore developers from doing business in Australia.
The proposal pitched as one of a raft of possible measures in the May budget to help young Australians enter the property market would be a waste of taxpayers’ money and potentially disastrous for the economy.
Foreign buyers already faced a wide range of restrictions and fees when it comes to investing in property in Australia.
Enough is enough.
The roll-on effect if this latest proposal is included in the May budget could be an economic disaster for Australia. 
This is just a ploy from the Government to make it look like they are doing something for first home buyers but it will just discourage offshore developers from investing in Australia.
The foreign buyer restriction could be the last straw and could result in driving away foreign buyers investing in Australian property. Excessive surcharges and further restrictions on foreign buyers could also lead to fewer international students coming to Australia as well as a slower population growth and a rise in unemployment.
Most buildings developed by onshore developers rely on local funding which typically limits their sales to foreign investors at 15-20 percent of the total sales.
This was not the first-time foreign buyers have faced a limit on the dwellings they can buy in Australia.
Before 2009, there was a regulation that meant developers could only sell half of their new dwellings in any development to foreign buyers.
But this all changed when the Global Financial Crisis (GFC) hit and the then Labor government decided to abolish the foreign limit for off the plan properties. This meant foreign buyers could buy whole developments if they were marketed both locally and overseas.
 
Mark Mendel, is founder and chief executive officer of iBuyNew.com.au and can be contacted <a href="https://www.ibuynew.com.au/" target="_blank">here.</a>
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Foreign investor restrictions could be disastrous: Mark Mendel

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The Queensland government will impose a 3 percent charge on foreign purchases of houses and apartments.
The extra tax follows Victoria's foreign investor surcharge which was recently increased to 7 percent.
The Baird government is preparing to introduce additional property taxes on foreign investors in its budget on June 21.
The Queensland treasurer Curtis Pitt said foreign investors would now have to pay an additional $10,962 on top of the existing $11,214 in transfer duty for a $365,000 house or apartment.
"This will ensure foreign purchasers of residential property, who benefit from government services and infrastructure, make a contribution to their delivery – as local buyers do," Mr Pitt told the Queensland Media Club in Brisbane on Thursday.
"We welcome mutually beneficial foreign investment. We are confident this surcharge – that does not affect Queenslanders – will also not affect the interest foreign investors have in sharing our state's economic strengths."
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