Foreign-Owned Development Finance Australia: FIRB and Pre-Sales
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FIRB Conditions · Qualifying Pre-Sales · Off-the-Plan Cover
Foreign ownership does not stop an Australian development being financed, but it changes the questions that decide whether the project can draw and exit. The lender will test the borrowing entity, the foreign-purchaser share of the qualifying pre-sale register, the conditions on the foreign investment approval, the source of offshore equity and the practical ability to sign and settle across jurisdictions.
Quick Answer
A foreign-owned Australian development can be funded, but the borrowing entity, foreign investment approval, qualifying pre-sale register and exit must all line up. Before the facility is sized, confirm whether the project entity is a foreign person, make sure the approval names the entity that will borrow, and get the lender's own foreign-purchaser policy in writing. If too few contracts qualify, the next question is whether to repair the register, change the lender or capital stack, or use a state support program where one applies.
Also called: FIRB approval for developers, foreign investment approval, offshore developer finance, non-resident development loan.
Start here: which of these are you?
- You have not bought the site yetSettle the buying entity, whether it is a foreign person and what land approval pathway applies before exchange. If the DA is not final, finance for the site is an earlier-stage problem than the construction facility. Finance a development site before DA
- You have just discovered an offshore shareholder or unitholderDo not assume Australian registration makes the project entity domestic. The foreign-person test looks through ownership and associates, while the lender separately traces beneficial ownership. Start with whether the entity is a foreign person
- You are sizing the facility and counting pre-salesSelling to a foreign buyer and having that contract count towards lender cover are two different events. What counts towards cover
- Your lender will not count enough foreign pre-salesFirst identify whether the problem is the contract itself or the lender's concentration policy. The fixes are different, and in New South Wales an eligible project may also have a government pre-sale pathway. What to do when the register comes up short
- A lender has quoted you a foreign pre-sale capThere is no industry-wide cap. Ask for that lender's own policy and re-run the register before the next drawdown request. Why every lender quotes a different number
- You hold, or want, a new dwelling exemption certificateTreat it as an ongoing sales and finance document with reporting and fee consequences, not a one-off permission slip. What the certificate does to funding
- You are selling new apartments to foreign purchasersThe current restriction on foreign purchases of established dwellings makes the new-dwelling pathway commercially more relevant, but it does not make every foreign contract a qualifying pre-sale. Why the 2025 to 2029 restriction matters
- A presale has fallen over or a purchaser may not settleTell the lender early. Losing a qualifying contract can trigger a fresh cover test during construction, while a failed settlement at completion creates an exit and residual-stock problem. What happens when a presale falls over
- You are at or near maturity and the build is not finishedRead the approval condition before you list or restructure anything, because it can reach a disposal even when a refinance remains possible. What the approval conditions permit
- Verification or signing is holding up settlementBuild the ownership chart, source-of-funds pack and execution plan before the documents arrive. Why offshore verification takes longer
If a summary told you a developer can sell half the dwellings to foreign buyers, read this first. That is a condition of a new dwelling exemption certificate. It is not your lender's limit on how much of the qualifying pre-sale register may be foreign contracts. Two different numbers, set by two different people, for two different purposes, and they are the most commonly confused pair on this subject.
Which version of the guidance this page reads. Foreign investment guidance is reissued as numbered versions, and older versions stay online and keep circulating in search results and AI answers long after they are superseded. Everything below was read against Guidance Note 6 Residential Land Version 5 (1 July 2026), Guidance Note 4 Commercial Land Version 7 (2 January 2026), Guidance Note 9 Exemption Certificates Version 4 (27 May 2025) and Guidance Note 10 Fees Version 11 (31 July 2026), all read on 2 September 2026. If a summary you have been given cites an earlier version number, it is describing a document that has since been replaced.
Do off-the-plan sales to foreign buyers count towards your lender's cover?
Foreign-buyer off-the-plan pre-sales can count towards a development lender's cover, but only when each contract meets that lender's qualifying pre-sale definition. Selling a dwelling off the plan to a foreign buyer and having that contract enter the qualifying pre-sale register are two different events, and only the second one moves your cover.
That distinction is the whole section, because construction funding is released against cover rather than against sales. A qualifying pre-sale is a contract the lender has agreed to count. A contract can be perfectly valid, fully executed and enforceable against the buyer and still be worth nothing on the register, and developers usually discover which of the two they are holding at the drawdown request rather than at exchange.
The prudential regulator's guidance to banks describes what a prudent internal policy looks like. It says good practice is for the policy to require pre-sale contracts to be "legally binding, conducted at arms-length, include a required non-refundable minimum deposit, and feature appropriate sunset dates consistent with expected completion dates". Those four limbs are the reason a contract fails the register far more often than it fails at law.
Basis: APRA, Prudential Practice Guide APG 112 Capital Adequacy: Standardised Approach to Credit Risk, section headed Land acquisition, development and construction. Effective 30 September 2024, read live 2 September 2026. Qualifier: a practice guide states good practice for authorised deposit-taking institutions. It is not a prudential requirement, it binds no non-bank or private lender, and APRA sets no number.
| What the lender checks | Why the contract may not count | What to confirm before relying on it |
|---|---|---|
| Contract status | The lender may require the contract to be legally binding and sufficiently unconditional for its policy | Ask for the lender's qualifying pre-sale definition and have the executed contract tested against it |
| Deposit | The amount, form or payment status of the deposit may not meet the lender's minimum standard | Minimum deposit, whether it must be cash, and what evidence of payment the lender requires |
| Arm's-length sale | A related-party, associated-party or otherwise non-arm's-length sale may be excluded or separately treated | Whether any relationship between developer and purchaser must be disclosed and how the lender treats it |
| Purchaser concentration | Several dwellings bought by one purchaser or connected purchasers may exceed that lender's concentration policy | The lender's limit for one purchaser, connected purchasers or a single sales channel |
| Foreign-purchaser concentration | A valid foreign-buyer contract can sit above the proportion of foreign pre-sales that this lender is prepared to recognise | The lender's own foreign-purchaser cap in writing. There is no industry-wide Australian percentage |
| Sunset date | A sunset date that is too close to expected completion can weaken the contract as reliable debt cover | The lender's required relationship between sunset date and expected completion |
| Purchaser settlement risk | Some lenders separately test whether the purchaser is realistically capable of settling at completion | Whether purchaser finance, residency, source of funds or other settlement evidence is part of this lender's assessment |
| Foreign investment pathway | The purchaser's approval or exemption-certificate pathway may not line up with the contract or development | Whether the sale is covered by the relevant approval or certificate and what evidence the lender wants on file |
A legally valid foreign-buyer contract is not automatically a qualifying pre-sale. The legal contract, the purchaser's foreign-investment position and the lender's credit treatment are three separate tests. Passing one does not automatically pass the other two.
Why the register matters at all is a capital question. Under the prudential standard for credit risk a bank may hold materially less capital against a development exposure that meets defined conditions, and one of those conditions turns on qualifying pre-sales once the exposure passes a stated size. The register is what lets the bank hold the lower amount, which is why the register is what the bank protects.
Read those figures for what they are. A risk weight is regulatory capital the lender holds against the exposure. It is not a price, it is not a rate, and it is not a loan to value limit, and none of it binds a non-bank or a private lender. What it does explain is why a bank asks about your register before it asks about almost anything else, and why the sell-down assumptions behind your gross realisation value are tested as hard as they are.
If a foreign pre-sale that the lender counted falls over, the lender may recalculate qualifying cover. During construction that can affect an undrawn facility or trigger a requirement for replacement sales, additional equity or another agreed remedy. If the purchaser instead fails to settle at completion, the problem is different because the expected debt repayment has also disappeared.
Rescission, a sunset date passing, a purchaser settlement failure and a re-count under the lender's foreign purchaser policy are not the same event. The first three can remove an actual contract or expected settlement from the project; the fourth changes how credit recognises contracts that may still be legally valid. The dedicated next-step guide is what happens when presales fall over after a development facility is approved. A project with no qualifying register at all sits in the separate no presales development finance lane, and the mechanics of how a facility is drawn are in how property development finance works in Australia.
If a drawdown has already been refused. Ask which contracts left the register and on what basis, because rescission, a sunset date passing and a re-count under a foreign purchaser policy are three different problems with three different answers. Only the third one is negotiable with the lender, and only the first two are worth taking to your solicitor.
One live change is worth knowing before you plan around any of this. APRA opened a consultation on 29 June 2026 proposing to adjust the criteria under which development exposures qualify for the lower risk weight, with a proposed effective date of 1 April 2027 and finalisation expected in the second half of 2026. As at the review date on this page the proposal is still a proposal, so the current standard is the one that applies, and no proposed threshold is stated here because none is settled.
Basis: APRA, consultation on changes to bank risk weights, announced 29 June 2026, read live 2 September 2026. Qualifier: a consultation proposal is not the law and not the standard. Check the current position before relying on it.
What if your lender will not count enough foreign pre-sales?
If the lender will not count enough foreign pre-sales, separate a contract-quality problem from a concentration-policy problem before you change anything. A weak contract can sometimes be cured or replaced; a foreign-purchaser cap belongs to that lender's policy, so arguing that the contract is legally valid does not change how much of the register credit will recognise.
- Reconcile the register contract by contract against the lender's qualifying definition, including deposit, arm's-length status, sunset date and any remaining conditions.
- Ask the lender to identify which contracts are excluded because of contract quality and which are excluded only because the foreign-purchaser concentration limit has been reached.
- If the policy itself is the blocker, test a lender whose internal policy fits the register rather than assuming the whole market uses the same cap. A non-bank or private lender may take a different view because APRA's prudential framework does not bind it.
- Re-size the facility if needed. More equity, a smaller senior debt amount, a staged project or a different capital stack can reduce the amount of qualifying cover the deal needs.
- If the project is in New South Wales and is otherwise construction-ready, test the New South Wales Pre-sale Finance Guarantee before treating the shortfall as permanent.
This is a single-jurisdiction program. It applies to New South Wales projects only, this page does not describe what any other state or territory does or does not run, and nothing here should be read as saying an equivalent does or does not exist elsewhere. For an eligible New South Wales project, the Pre-sale Finance Guarantee is specifically designed for developments where the lender requires more pre-sales before construction funding can be drawn. Current eligibility requires the project to be in New South Wales, hold the relevant planning and development approvals, have indicative lender finance approval stating the pre-sale condition, contain at least four homes and be capable of substantial construction commencement within six months of formal program contracts. The Government can commit to acquire qualifying dwellings, subject to program caps, valuation discounts, fees and assessment. It is not a substitute for getting the development finance approved, and it is not available Australia-wide.
Basis: New South Wales Department of Planning, Pre-sale Finance Guarantee, current program page and eligibility criteria, read live 2 September 2026. Qualifier: New South Wales Government program only. Eligibility, pricing, fees, commitment size and acceptance are assessed under the program terms and can change.
If the project does not fit the program, the decision becomes commercial rather than regulatory: repair the register, reduce the debt, change the lender or change the capital stack. The no-presales version of that decision is covered in no-presales development finance.
Why does every lender quote a different foreign pre-sale cap?
There is no industry-wide foreign pre-sale cap in Australia. Each lender sets its own qualifying-pre-sale and concentration policy, which is why one lender can count a foreign contract that another lender shades or excludes.
The guidance says so on its face. Good practice is "to include within the policy a maximum proportion of presales to a single entity or individual, or to foreign purchases". The proportion itself is not named, because naming it was never the regulator's job. It is the lender's.
Basis: APRA, Prudential Practice Guide APG 112, section headed Land acquisition, development and construction. Effective 30 September 2024, read live 2 September 2026. Qualifier: good practice for authorised deposit-taking institutions, not a prudential requirement, and binding on no non-bank or private lender.
Two things follow from that. A practice guide describes good practice; it is not a rule you can hold a lender to, and it does not reach a non-bank or private funder at all, so a figure lifted from one bank's policy tells you very little about the funder most likely to write a foreign-owned deal. And the same sentence that leaves the foreign proportion to the lender leaves the minimum deposit and the sunset dates to the lender too, for exactly the same reason.
So the practical answer is unglamorous, and it is the whole answer. Ask the specific lender for its own foreign purchaser policy, in writing, before the feasibility is locked, rather than planning against a number found online. A published figure is not wrong; it is one lender's policy at one point in time, and it is not yours until your lender says it is. How that assumption gets tested is in how lenders test your sell-down plan, and where it lands in the arithmetic is in the numbers in a property development finance approval.
What to ask for in writing, who to ask, and what to do if you are past that point
Six requests decide almost everything on a foreign-owned file, and none of them costs anything to make. The order matters: each one either confirms or breaks an assumption the next one rests on.
| Ask for this | Ask whom | What it decides | If you are already past that point |
|---|---|---|---|
| The written foreign purchaser policy, meaning the maximum proportion of the qualifying register that may be foreign contracts | The lender's credit team, through your broker | How much of your register actually counts | Re-run the cover against that limit before the next drawdown request rather than at it |
| The qualifying pre-sale definition in full, not a summary of it | The lender | Whether each executed contract counts at all | Have your solicitor test the contracts you already hold against the definition, contract by contract |
| The approval and every condition written on it, from the approval document itself | Your solicitor, from the file | What you may do with the site before completion | Read it against the facility maturity date today, not when the maturity date arrives |
| Confirmation that the approval names the entity that is actually borrowing | Your solicitor | Whether the file carries a mismatch that will surface at credit | Raise it before drawdown, because the lender's solicitor will find it and the timing will not be yours |
| The exemption certificate and every six-monthly report lodged under it | Your own records and your solicitor | Whether the foreign portion of the register still has a basis | Assemble the reports before the financier asks, because being asked and not having them is the damaging version |
| Evidence the local agent appointment is current, not lapsed since registration | Your solicitor or company secretary | Whether documents can be served and settlement can be booked | Check it now. It is the cheapest item on this list and the one most often left until the week of settlement |
Which lenders will fund a foreign-owned development entity?
Foreign-owned development entities can be funded by senior banks, non-bank lenders and private lenders, but foreign ownership usually narrows the lender panel and increases verification and guarantee work. It is a credit policy question, not a legal ban on borrowing.
Most of what is written about this treats three quite different borrower shapes as one thing. An Australian registered entity that is a foreign person by shareholding is one shape. An offshore parent funding through an Australian subsidiary or a special purpose vehicle is a second. An Australian entity with non-resident directors, or with offshore guarantors standing behind it, is a third. Those three produce three different credit reads, three different security packages and three different verification burdens, and a lender comfortable with one of them is not automatically comfortable with the next.
Are you a foreign person, and is this even the right page?
Whether your entity is a foreign person is a threshold question decided by ownership, associates, control and trust interests rather than by where the directors happen to live. Current Australian guidance describes a substantial interest in a corporation as generally at least 20 per cent held by one foreign person with associates, and an aggregate substantial interest as generally at least 40 per cent held by two or more foreign persons with associates. Those percentages are not a shortcut: tracing and associate rules can change the result, so have the actual structure checked before exchange or credit submission. The wider feasibility consequences are covered in what a lender tests in a development feasibility.
Basis: Australian Government, Key concepts, last updated 12 December 2025 and read live 2 September 2026, together with the current foreign-investment policy definitions. Qualifier: legal status depends on the Act, regulations, associates and the actual ownership chain; this page does not determine whether your entity is a foreign person.
Two tests get confused constantly, and confusing them costs weeks. The foreign person test decides whether an approval is needed at all and what conditions attach to it. The beneficial owner test your lender applies decides whose identity has to be verified on the file. They are separate tests with separate thresholds and separate consequences, and clearing one tells you nothing about the other.
| Your situation | Is this the right page | Where the real question sits |
|---|---|---|
| Australian entity, one or more offshore shareholders | Yes | The entity can be a foreign person by shareholding even though it is registered here |
| Offshore parent funding an Australian subsidiary or special purpose vehicle | Yes, with a carve-out | The funding structure and its tax treatment is a registered tax agent's question, not a broker's |
| Australian entity, Australian shareholders, non-resident directors | Partly | Director residency is not the foreign person test. It shows up as verification, signing and service |
| A non-resident individual buying one investment property | No | That is an income and servicing question, covered in borrowing in Australia as a non-resident |
| A foreign individual buying a home to live in | No | A residential purchase question on a different approval pathway, and not a development funding question at all |
If contracts are already exchanged. The question changes shape rather than disappearing. It stops being how to structure the entity and becomes whether the approval names the entity that is actually borrowing, and what has to happen if it does not. That is a solicitor's question and it is materially cheaper before the credit submission than after a drawdown request.
Before you lock the land cost, check state foreign-owner surcharges as a separate feasibility line. State duty and land-tax settings are not the same thing as FIRB approval. This too is one jurisdiction only, and duty and land tax are set separately in every state and territory, so treat what follows as an illustration of the kind of relief that can exist rather than as the national position. For example, the New South Wales revenue authority currently allows qualifying Australian-based developers that are foreign persons to seek an upfront exemption from surcharge purchaser duty, with related surcharge land-tax treatment, subject to the New South Wales conditions and evidence requirements. Do not assume the surcharge is either always payable or always recoverable; have the state position confirmed before the site price and equity contribution are fixed.
Basis: New South Wales revenue authority (Revenue NSW), Commissioner's Practice Note CPN 023, exemption approval for foreign Australian-based developers, read live 2 September 2026. Qualifier: New South Wales only; state duty and land-tax treatment is a legal and tax matter, not a finance rule.
What each lane changes, and what it means for your file
| Lender type | What foreign ownership changes | What it means for your file |
|---|---|---|
| Senior bank lenders | A credit policy question, not a legal bar. It bites hardest on the pre-sale register and the guarantee structure | Expect the register and the ownership chain to be tested before anything else is discussed |
| Second tier and non-bank lenders | Sits outside the prudential capital framework, so the pre-sale test is the lender's own commercial view | More room to negotiate the register, and the flexibility is priced |
| Private lenders | Assesses the security and the exit rather than the borrower's residency | Often a faster path, usually on a shorter term, and the exit still has to survive the approval conditions |
| Offshore or related-party funding from the parent | A separate question with its own tax treatment, outside a broker's scope | Route to a registered tax agent before the structure is settled, not after |
The non-bank and private lane is wider here precisely because it sits outside the prudential capital framework that shapes a bank's appetite. That framework is where the pre-sale test above comes from, and it is why the same register of contracts can be worth one thing to a senior bank lender and something quite different to a second tier funder or a private lender. How that lane structures and prices a deal is set out in how private lending works in Australia, and what a development facility actually funds is on the property development finance page.
One separation before anything else. How an offshore parent funds an Australian subsidiary, and how that funding is treated for Australian tax, is a registered tax agent's question and not a broker's; get it answered before the structure is settled rather than after the credit submission has gone in.
What does a FIRB exemption certificate do to your funding?
A new dwelling exemption certificate can let covered foreign purchasers buy eligible new or near-new dwellings without applying individually, but for the developer it becomes an ongoing condition of the pre-sale register. A financier therefore treats the certificate as part of the evidence behind cover, not as a marketing convenience.
The conditions are the starting point, and one of them removes whole projects from the mechanism. A new dwelling exemption certificate, which is what people are usually asking about when they say FIRB exemption certificate, requires a development of fifty or more dwellings other than townhouses, with development approval. The developer may sell no more than half the total dwellings in the development to foreign persons, and no more than three million dollars worth of dwellings to a single foreign person. The dwellings must be marketed for sale in Australia, and the developer must report every six months until every dwelling is sold.
Two readings are worth getting right. A townhouse development, however many dwellings it contains, cannot use the certificate at all, so every foreign buyer in it applies individually and the register behaves completely differently. And the three million dollar limit is cumulative per foreign person across the development, not a value cap on any one dwelling, which matters when a single buyer is taking several.
Basis: Foreign Investment Review Board and Treasury, Guidance Note 6 Residential Land, Version 5 (1 July 2026), corroborated by the Australian Taxation Office guidance on exemption certificates for property developers, page updated 7 March 2025. Both read live 2 September 2026. Qualifier: standard conditions as published; an individual certificate may carry different or additional conditions. Not legal advice.
| The condition | What it requires | What it does to your funding |
|---|---|---|
| Development size | Fifty or more dwellings, other than townhouses | A townhouse project cannot use the certificate at all, so every foreign buyer applies individually |
| Foreign sales cap | No more than half the total dwellings in the development sold to foreign persons | Sets a hard ceiling on how much of the register foreign contracts can ever fill |
| Per-buyer limit | No more than three million dollars worth of dwellings in the development to a single foreign person | Limits concentration on one buyer, which is the same risk the lender is already managing |
| Australian marketing | The dwellings must be marketed for sale in Australia | A sales campaign run only offshore puts the certificate at risk, and the register with it |
| Reporting | A report every six months until every dwelling is sold | An ongoing evidence task the financier will ask to see, not a one-off approval |
| Variation and revocation | The certificate can be varied or revoked, and breach can bring penalties and revocation | Every foreign pre-sale written under the certificate depends on it staying on foot |
The condition that reaches furthest into a facility is the last row. A certificate can be varied or revoked where the Treasurer is satisfied the variation or revocation is not contrary to the national interest or national security, and a developer who does not comply may face civil and criminal penalties as well as revocation of the certificate. Stated as a funding fact rather than a compliance fact: every foreign pre-sale written under that certificate depends on it staying on foot, so an event that has nothing to do with your lender can empty a section of the register the facility is sized against.
Basis: Foreign Investment Review Board and Treasury, Guidance Note 9 Exemption Certificates, Version 4 (27 May 2025) on variation and revocation, and the Australian Taxation Office guidance above on penalties and revocation for non-compliance. Both read live 2 September 2026. Qualifier: general description of the framework, not advice on any particular certificate.
The fee structure is the part most often misread as a saving. The certificate carries an application fee, and a reconciliation fee is then payable for each dwelling acquired by a foreign person under the certificate, calculated by reference to the fee that would have applied had that purchaser sought approval individually. The developer is nominally liable, although current guidance allows the developer and purchaser to agree who pays and provides a payment reference for a purchaser who pays directly. The certificate therefore does not remove the per-sale fee mechanism. It changes who applies and how the fee is administered. Fees are indexed and the schedule changes, so use the current Government schedule at the time of application rather than a figure copied from an older article.
Basis: Foreign Investment Review Board and Treasury, Guidance Note 10 Fees, Version 11 (31 July 2026) and the accompanying schedule of fees, read live 2 September 2026. Qualifier: fee structure only, deliberately stated without amounts because the schedule is indexed annually on 1 July.
The six-monthly report is the ongoing piece. It is not a one-off approval task; it is a recurring evidence obligation, and the financier will ask to see that it has been met, in the same way it asks to see that what a pre-sale is has been satisfied on each contract. Where the certificate sits in the wider feasibility is covered in what a lender tests in a feasibility.
Why does the 2025 to 2029 established-dwelling restriction matter to your sales plan?
The current foreign-investment settings push foreign residential demand towards new housing. From 1 April 2025 to 30 June 2029, foreign investors are generally prohibited from purchasing established dwellings in Australia unless a limited exception applies, while current government policy explicitly channels foreign investment into new dwellings because new development increases housing stock.
For a developer, that makes the new-dwelling pathway commercially more important, but it does not make a foreign contract automatically bankable. A covered purchaser may be able to rely on the developer's exemption certificate instead of lodging an individual proposal, yet the lender still decides whether that contract counts towards qualifying pre-sale cover. Demand policy and credit policy remain separate tests.
Basis: Australian Government, Residential land guidance, last updated 1 July 2026 and read live 2 September 2026. Qualifier: foreign investors are generally prohibited from purchasing established dwellings from 1 April 2025 to 30 June 2029, subject to limited exceptions. This is a demand and eligibility setting, not a statement that any purchaser will settle or that any lender will count the contract.
What do FIRB approval conditions do to your facility and your exit?
FIRB approval conditions can set development deadlines and restrict disposal before completion, which can remove a repayment path the development facility was relying on. Those approval conditions run on their own timetable, separate from the facility term and the pre-sale sunset dates.
| What the approval addresses | Vacant residential land | Vacant commercial land |
|---|---|---|
| The condition | Construction of all dwellings completed within four years from the date of notice of approval | Continuous construction of the proposed development commencing within five years of completing the purchase |
| The verb that matters | Completed | Commencing |
| Evidence obligation | Evidence of completion submitted within thirty days of being received | Not specified in the same terms |
| Disposal before completion | The foreign person must not sell, transfer or otherwise dispose of their interest in the land prior to construction of all dwellings being completed | The interest in the land must not be sold, transferred or otherwise disposed of prior to the development being completed |
| What that does to a facility exit | A sale of the part-built site is not available as a repayment path | A sale of the part-built site is not available as a repayment path |
Basis: Foreign Investment Review Board and Treasury, Guidance Note 6 Residential Land, Version 5 (1 July 2026) and Guidance Note 4 Commercial Land, Version 7 (2 January 2026), both read live 2 September 2026. Qualifier: standard conditions as published. Individual approvals may carry different or additional conditions. Not legal advice.
Those are the standard conditions as they read in Guidance Note 6 Residential Land Version 5, dated 1 July 2026, and Guidance Note 4 Commercial Land Version 7, dated 2 January 2026. Earlier versions of both are still online and still being quoted. The asymmetry in the middle of that table is the thing to hold on to. On vacant residential land the condition is completion: construction of all dwellings completed within four years from the date of notice of approval, with evidence submitted within thirty days of being received. On vacant commercial land the condition is commencement: continuous construction of the proposed development commencing within five years of completing the purchase. One regime asks whether you finished. The other asks whether you started and kept going. They are not interchangeable and a developer holding both kinds of site is running two clocks.
What if the ownership, borrower or exit changes after approval?
Changing lenders does not automatically change a foreign investment approval, but changing the investor, ownership structure, borrowing entity or proposed action can create a mismatch between the approval and the transaction that now exists. Check the approval before the restructure, not after the new finance has been approved.
| What changes | What to check before doing it | Why the lender cares |
|---|---|---|
| New investor or joint-venture partner | Whether the ownership or control change creates a new foreign-investment issue or changes the approved investor | Credit, guarantees, equity support and ultimate ownership may all change |
| Borrowing entity changes | Whether the entity on the approval still matches the entity acquiring or holding the land and signing the finance | The security and borrower package must attach to the entity that actually owns the project |
| Shareholding or control changes | Whether the foreign-person status, control position or approved ownership has changed | A lender may need updated KYC, beneficial-owner evidence and approval advice before drawdown |
| Refinance to another lender | Whether the approval still fits the investor and action, and whether any new security structure changes the transaction | The new lender must be able to take and enforce the required security without assuming an exit the approval blocks |
| Facility extension | The extended maturity date against the development deadlines and disposal restrictions in the approval | An extension only helps if the project can still comply and reach a lawful repayment path |
| Sale of a part-built site | The approval's disposal restriction and whether a variation is needed before sale | A sale cannot be treated as the exit if the approval prevents the disposal |
| Completed unsold stock | Whether the relevant development condition has been satisfied and whether the project can move into residual-stock finance | Once completion has occurred, the repayment strategy can shift from construction debt to completed-stock funding |
| Approval condition no longer fits | Take legal advice early on whether a variation is available and what evidence or timing it requires | A finance approval cannot cure a foreign-investment condition that blocks the proposed transaction |
Foreign investment approvals and exemption certificates can have variation processes, but whether a particular restructure is covered, needs a variation or requires a new application is a legal question. From the finance side, the rule is simpler: do not let the lender underwrite a borrower, security package or exit until the approval has been checked against that exact transaction.
The three clocks nobody puts on one page
A foreign-owned development runs three timetables at once, set by three different parties, and the file is usually built as though only one of them exists. They are not aligned by anything, and the earliest one to expire is the one that decides your options.
| The clock | Who sets it | What it runs from | What happens if it expires first |
|---|---|---|---|
| The approval condition | Written on the approval itself | The date of notice of approval on vacant residential land, or completing the purchase on vacant commercial land | A compliance event, and the disposal restriction is still on foot regardless of what your facility needs |
| The facility term | The lender, in the loan agreement | Drawdown or as otherwise documented | Maturity, and the repayment paths narrow to extension, refinance or sale |
| The pre-sale sunset dates | The individual contracts, which the lender's qualifying definition expects to be consistent with expected completion | Exchange on each contract | Contracts can leave the register and cover falls with them, while the build keeps consuming funds |
Two of those three are usually visible to the developer and one is not. The approval condition sits in a document filed at purchase and rarely reopened, while the facility term is in front of everyone and the sunset dates are in the contracts. Putting the three dates on one line, once, at approval, is a fifteen minute task that changes which repayment paths exist eighteen months later.
Both approval regimes then close the same door. The interest in the land must not be sold, transferred or otherwise disposed of before construction is complete. Read that against a facility approaching maturity and the finance consequence is direct: a part-built sale, a staged disposal or a distressed exit runs into an approval condition before it ever runs into the loan agreement. The repayment path a lender assumes is available may not be available at all, and neither the lender nor the borrower usually finds that out until the option is needed.
If you are already at maturity and the build is not finished
Read the approval condition before you do anything else, because it decides which of the paths below are actually open to you rather than merely available in principle. In rough order of cost and speed:
- Read the condition on the approval document itself, today. Not a summary of it, and not what you remember it saying at purchase.
- Talk to the incumbent about an extension. It is the only path that does not require a new party to get comfortable from a standing start.
- Look at a refinance to a lender who will fund the balance of works. That is a finance conversation and the approval condition does not reach it.
- Start a variation of the condition with your solicitor if the exit you need is a disposal. It runs on its own timetable rather than yours, which is why starting it at maturity is starting it late.
- Test any sale of the part-built site against the condition before you spend money on a campaign, because this is the one path the condition reaches directly.
Conditions can be varied. That is a solicitor's task and it is started early rather than at maturity. What happens at that point is set out in what happens when a development facility expires before completion, and the cleaner version of the same moment is in what happens to a development loan at practical completion.
A completed project changes the picture again, and it changes it in your favour. Once construction is complete the disposal restriction has done its work, and holding unsold stock on a residual stock loan becomes a live option rather than a theoretical one. Holding an undeveloped site instead is land banking, which is the outcome the conditions exist to prevent. Where a short-term instrument is needed to bridge a variation or an extension, a second mortgage behind the incumbent and caveat loans for business owners are the two shapes that come up most, and both live or die on whether the exit behind them survives the approval condition.
Why does verification take longer when the ownership sits offshore?
Offshore ownership usually takes longer to verify when the lender must trace layered companies or trusts through to the natural persons who own or control them. The delay is in the ownership chain and source-of-funds evidence, not in the project being foreign-owned.
The test has two limbs, and the second one is the one that surprises people. A beneficial owner is an individual who directly or indirectly owns twenty-five per cent or more of the customer, or who controls the customer. The ownership limb has a percentage. The control limb does not: the regulator's own guidance says "You don't need to own another person to have control", and control can rest on board composition or on practical influence and established patterns of behaviour. So people who hold no stake at all can still be caught, and a chart drawn only from the share register will miss them.
Basis: AUSTRAC, Determining ownership and control structures, read live 2 September 2026, which also states that where there is a chain of owners "You must follow this chain of ownership until you can determine the individual(s) who are the beneficial owner(s) of the customer." Qualifier: an anti-money-laundering obligation on the reporting entity, not a lending rule and not a test of your project.
| The factor | Quick to verify | Slow to verify |
|---|---|---|
| Depth of the chain | One corporate layer between the project entity and its ultimate owners | Layers of holding companies across more than one jurisdiction |
| How ownership is held | Ownership traced to named natural persons on documents you already hold | Nominee or bare trustee holdings that obscure who actually controls the entity |
| Trust structures | No trust, or a trust with an identified controller | A discretionary trust with a broad beneficiary class and no clear controller |
| Document currency | Registers and constitutions current, and consistent with what the shareholders say | Identity documents that do not match the register, or that have expired |
| Source of funds | Source of funds for offshore equity documented before the credit submission | Equity arriving from an account nobody in the group will explain |
| Who answers | One person in the group who can answer identity questions for every entity | Questions routed to whoever happens to be in the right time zone |
Two practical points follow. The obligation sits with the service provider rather than with you, which is why the same questions arrive from the lender, the broker and the solicitor and why answering one of them does not answer the others. And source of funds evidence for offshore equity is a separate request from identity evidence: proving who someone is does not prove where the money came from, and the second request usually lands after the first one is satisfied, which is what makes the process feel like it keeps restarting.
The fix is boring and it works. Assemble the ownership chart and the identity pack before the credit submission goes in rather than in response to it, and have one person in the group able to answer for every entity in the chain. The same discipline applies to income and servicing evidence when the people behind the entity are not resident here, which is covered in borrowing in Australia as a non-resident.
If the submission is already in and the questions keep coming. Build the chart and the pack anyway, in one document, and send it unprompted. A file that answers the next three questions before they are asked stops the cycle; answering one question at a time is what makes verification feel endless.
Who signs, and who can be served, when the guarantor is overseas?
Offshore signing usually becomes an execution and timing problem rather than a reason the deal cannot settle. A registered foreign company carrying on business in Australia must have a local agent for service, while the lender's solicitor still decides the acceptable execution and witnessing method for each finance document.
A foreign company carrying on business in Australia must be registered, and the corporate regulator requires it to appoint a local agent, described as "an individual or an Australian company resident in Australia authorised to accept, on behalf of the foreign company, service of process and notices". That appointment is a live obligation rather than a form filed once, and it is one of the first things a lender's solicitor checks.
Basis: Australian Securities and Investments Commission, Register a foreign company in Australia, page updated 24 November 2025, read live 2 September 2026. Qualifier: this is a corporate registration obligation, not a lending rule, and it does not determine whether any guarantee is enforceable. Enforceability is a question for a solicitor and nothing on this page addresses it.
One disambiguation first, because the vocabulary collides. A finance condition on a development site acquisition contract is not the finance clause on a house purchase, and almost everything written about waiting on a finance clause is written for an owner-occupier buying a home. On a development site the counterparties are a project entity, a construction financier and a vendor, the condition is usually tied to a facility offer rather than a home loan pre-approval, and the consequences run through drawdown rather than through a cooling-off period. Read anything you find on the subject with that distinction in mind.
The drawdown sequence, described qualitatively, is where the days actually go. Documents issue, a signatory sits in another time zone, execution has to be arranged in a form the incoming lender will accept, originals or certified copies have to reach the right desk, and only then does settlement get booked. Every one of those steps is ordinary. Stacked across a time difference, with one document needing a witness who is qualified in the right place, they are what turns a clean approval into a missed settlement date.
Execution formalities and witnessing requirements differ by document and by jurisdiction, and they are the solicitor's call rather than the broker's or the lender's. Get the execution method for every document confirmed by your solicitor at the time documents issue, not on the day before settlement. That is the single point where these deals most often lose a date, and it is also the easiest to fix in advance. What a guarantee is and what standing behind one means is set out in what a guarantor is, and how a lender reads the income of people who are not resident here is in how lenders read foreign income.
If settlement is this week and a signature is offshore. Confirm two things in the same message: the execution method the incoming lender's solicitor will accept, and whether the local agent appointment is current. Those two answers determine whether the date holds. Everything else on the file at that point is noise.
From our broking, indicative
When the borrowing entity is foreign-owned, the first things a credit team asks for are almost always the same, and almost always in the same order: the ownership chart traced to natural persons, then the approval and the conditions written on it, then the pre-sale register with the contracts sitting behind it. Everything else in the submission waits on those three.
What makes an offshore file land well is structural and unglamorous:
- Beneficial ownership traceable to a natural person on the documents you already hold
- The project entity structured before the contract rather than after it
- The approval naming the entity that is actually borrowing
- A local agent appointed and current, not lapsed since registration
- The source of funds for offshore equity documented before the credit submission, not during it
What stalls a drawdown is rarely the credit decision. It is a signatory in another time zone, a document that needs witnessing in a form the incoming lender's solicitor has not seen before, or a local agent whose appointment nobody has looked at since the company was registered. Settlement dates go to administration far more often than they go to appetite. The rest of the build lane sits under construction and builder finance.
What gets these files declined is a short list, and none of it is really about being foreign. Ownership that cannot be traced to a natural person on the documents provided. Offshore equity with no documented source. A project entity restructured after contracts were exchanged, so the approval names one entity and the borrower is another. A register that leans on an exemption certificate the developer has not been reporting under. And an exit the approval condition does not permit, discovered at maturity rather than at approval. Those are file problems that foreign ownership makes visible, not foreign ownership problems.
Indicative and qualitative only, drawn from deals we have placed, as at September 2026. Deliberately no figures: no rate, no loan to value band, no fee, no timeframe and no approval likelihood. This is not a quote, not an offer and not a statement of what any lender will do. Actual outcomes depend on lender policy and your circumstances at the time of application. Not financial advice.
A foreign-owned project is not one problem. It is a sequence: decide whether the project entity is a foreign person before exchange, make the approval and borrowing entity match, test every pre-sale against the lender's own definition and foreign-purchaser policy, keep certificate reporting current, and reconcile the approval clock with the facility and pre-sale sunset dates. If the register comes up short, the answer may be a repaired contract set, a different lender, more equity or a state support program rather than a dead project.
Key takeaway: solve the entity, approval and pre-sale policy before the facility is sized, then keep the three clocks and the register current through construction. Most expensive problems on a foreign-owned development start as cheap questions that were asked too late.Frequently asked questions
A foreign person acquiring an interest in Australian land may need approval or notification before acquiring it, and the answer depends on the investor, the land type, the monetary threshold and any exemption. For a development company, the first step is to determine whether the entity is a foreign person and whether the site is residential or commercial land. This page then deals with the finance consequence: what the approval conditions do to the pre-sale register, lender panel and exit.
It can be, but one overseas shareholder does not automatically decide the answer. Current Australian guidance generally treats a single foreign person with associates holding at least 20 per cent of a corporation as a substantial interest, and two or more foreign persons with associates holding at least 40 per cent in aggregate as an aggregate substantial interest. Tracing, associates, trusts and control can change the result, so the actual structure should be checked before exchange or credit submission.
Yes. A foreign-owned company can borrow to develop property in Australia. Foreign ownership is usually a lender credit-policy, verification and guarantee issue rather than a legal bar on borrowing. The lender still assesses the site, feasibility, equity, builder, pre-sale register and exit, and the panel can narrow depending on the ownership chain and how much of the register is made up of foreign purchasers.
No mainstream development facility funds the whole cost of a project. The developer contributes equity or land value, and the facility funds the balance against defined conditions and a tested exit. What a facility funds, and what it is measured against, is set out on the property development finance page.
There is no single figure, because the contribution is worked back from the project rather than set as a headline. A lender tests the total development cost, the realisable value on completion and the cover behind the exit, and the equity required falls out of that arithmetic. What gets tested, and in what order, is in what a lender tests in a feasibility.
They can, but only if each contract meets that lender's qualifying pre-sale definition and remains inside that lender's foreign-purchaser concentration policy. A legally valid contract is not automatically a qualifying pre-sale. Ask the lender to identify separately which contracts fail because of contract quality and which are excluded only because its foreign-purchaser cap has been reached.
In a development context, a new or near-new dwelling exemption certificate can allow covered foreign purchasers to acquire eligible dwellings in the development without each purchaser seeking individual foreign investment approval. The certificate carries conditions, limits, reporting and fee obligations, so a financier treats it as evidence behind the foreign portion of the pre-sale register rather than as a sales convenience.
Generally yes, subject to Australia's foreign investment rules and the buyer's circumstances. Current Government policy channels foreign residential investment towards new dwellings, while foreign investors are generally prohibited from buying established dwellings from 1 April 2025 to 30 June 2029 unless a limited exception applies. A developer's exemption certificate can streamline approval for covered new or near-new dwellings, but the lender separately decides whether those contracts count towards pre-sale cover.
No. The certificate changes the application pathway, not the existence of the fee mechanism. The developer pays an application fee for the certificate and reconciliation fees are payable for dwellings acquired by foreign persons under it, calculated by reference to the fee that would otherwise have applied. Current guidance allows the developer and purchaser to agree who pays the reconciliation fee, and the Government fee schedule should be checked at the time because fees are indexed.
The contracts do not vanish, but the basis on which foreign buyers were acquiring under the certificate does. A certificate may be varied or revoked where the Treasurer is satisfied that doing so is not contrary to the national interest or national security, and a developer who does not comply may face civil and criminal penalties as well as revocation. For a facility sized against a register that includes foreign contracts written under that certificate, revocation is a cover event as much as a compliance event, which is why a financier asks to see the six-monthly reports and not just the certificate.
The statutory decision period is 30 days after the correct fee has been paid, but that is not a guaranteed settlement timetable. The period can be extended and an incomplete or changing proposal can take longer. For a development finance file, the critical issue is not only elapsed time but whether the final approval and its conditions name and fit the entity that will actually borrow and own the site.
Do not assume the existing approval still fits. Changing lenders alone does not automatically change a foreign investment approval, but changing the investor, ownership or control, borrowing entity or proposed action can create a mismatch between the approval and the transaction now being financed. Check the approval before the restructure. Whether the change is already covered, can be varied or needs a new application is a solicitor's question.
Generally no, not while the approval condition is on foot. Approval to acquire vacant residential land is generally conditional on the foreign person not selling, transferring or otherwise disposing of their interest in the land prior to construction of all dwellings being completed. Approval on vacant commercial land is generally conditional on the interest in the land not being sold, transferred or otherwise disposed of prior to the development being completed. Those are standard conditions as published; an individual approval may carry different or additional conditions, and varying one is a solicitor's task started early rather than at maturity.
Potentially, for an eligible New South Wales project. The program is specifically designed for developments where a lender requires more pre-sales before construction funding can be drawn. The project must meet the New South Wales eligibility criteria, including holding the relevant approvals and indicative lender finance approval stating the pre-sale condition. Government support is assessed, carries program terms and fees, and is not a substitute for the lender approving the development finance itself.
Yes. What it changes is not eligibility but the lending file. Identity and beneficial ownership have to be traced through the structure to natural persons, and where the borrower is itself a registered foreign company it must appoint a local agent, an individual or an Australian company resident in Australia, authorised to accept service of process and notices on its behalf. Company law questions about who may sit on an Australian board are for your solicitor.
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