The interesting fact is that, many potential new buyers in the market are very interested in “second-hand” off-the-plan properties/Nomination Property that are coming back to the market for nomination sale.
Many buyers especially overseas buyers are unable to settle the off-the-plan property they purchased due to various reasons, so they decide to put the property back on the market and seek new buyers to nominate the property. the following 4 major advantages make these nomination properties are very attractive to potential new buyers.
Generally speaking, the construction cycle of the apartment project ranges from 1 to 3 years, and the construction cycle of townhouses ranges from 1 to 2 years. The off-the-plan properties are usually seen to be settled 3 to 6 months before delivery, if the original buyer finds that he/she has insufficient loan ability after the loan evaluation, they tend to nominate the property during this period. For some potential new buyers in the market who are looking forward to the delivering and moving in as soon as possible, they will definitely benefit from nomination sale. Simply put, nomination property is a very good choice for those buyers who are eager to move in immediately.
We have been witnessing the constant increase in house price in Australia these years, while you buy a nomination property where the contract was signed few years ago, then you can absolutely buy under a respectively good price compared to the new house prices in the market now. No mention that some original buyers who are desperate to nominate their property, they are very likely to lose some money as the settlement date gets closer and closer. Correspondingly, you, as a new buyer, can save more money to buy a new home.
As we all know, there are many requirements for overseas buyers buying second-hand houses, such as self-occupation, no rental, and continuous residence visas for more than 12 months. The good news is that the Australian government has allowed overseas buyers to take over off-the-plan properties that have not been sold on time for some reasons. That is, off-the-plan properties that cannot be settled successfully with the original buyers can still be nominated to overseas people as new houses. And the following conditions must be met: the real estate contract has been terminated before the ownership transfer; and the second sale of the real estate must be directly sold by the developer to the buyer.
For those overseas buyer who are not an Australian citizen, Australian permanent resident or New Zealand citizen, you need to apply for the FIRB with Overseas Investment Management Committee. The FIRB application fee is $5,600 if the off-the-plan or land price is under $1 million; otherwise, the price will gradually increase.
Since late 2016, Australian states began to required overseas buyers to pay additional stamp duty. For example, any contracts signed after July 1, 2016 in Victoria, overseas buyers need to pay an additional 7% stamp duty. And contracts after July 1, 2017 will also pay their own 5.5% stamp duty. However, through the nomination sale, it can save the original buyer stamp duty or get a stamp duty refund; or save the new buyer tax cost and pay the stamp duty fee requested by the original contract.
Taking the above advantages and the tightening loan policy into consideration, buyers who have with loan ability or hold cash have become the absolute initiative in the real estate market. If you are the original owner of the off-the-plan property, and you cannot settle the property due to the rejection of the loan, the inability to obtain a loan, or various other similar problems, then the best solution to which is put the property for nomination sale and find a new buyer to take over the contract.