Under the amended Overseas Investment Act (Amended OIA), which took effect from 22 October 2018, any transaction involving the sale and purchase of residential property by an overseas person is subject to consent from the Overseas Investment Office (OIO) unless an exemption applies.

In this blog, we focus on residential property developers who intend to sell units in their developments to overseas persons and provide an overview of the considerations these developers will need to make under the Amended OIA.

Exempt or not?

The starting point for all residential property developers is to find out whether there are any exemptions that apply to them.

Exemptions are available to residential property developers who are developing land that is:

  1. Residential and not otherwise sensitive land under the OIA; and
  2. Used or intended to be used to build one ore more multi-storey buildings consisting of least 20 residential dwellings.

(Exemption Criteria)

These exemptions are not available to developers who are merely subdividing greenfield or brownfield land and not building or building only terraced dwellings.

Exemptions

There are two useful exemptions available to residential property developers who fit the Exemption Criteria: one is the Transitional Exemption Certificate and the other is the Exemption Certificate.

Developers who have committed to the development and commenced at least one genuine presale (even if it is conditional) before 22 October 2018 may apply for a Transitional Exemption Certificate to continue selling up to 100% of the units in that development to overseas persons.

Developers who have not commenced presales before 22 October 2018 may only apply for the Exemption Certificate which allows them to sell up to 60% of the units in their development to overseas persons.

If you need any assistance in obtaining a Transitional Exemption Certificate or Exemption Certificate, we can assist you step by step in the process of applying to the OIO for such exemption, including advising you what you will need to provide to the OIO for a successful application.

In our next blog, we will talk about how overseas buyers of residential land are affected by the Amended OIA and the considerations they will need to make under the Amended OIA.