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Property development plans in seeking subclass 188A Nomination

Many potential applicants for the 188A business innovation visa enquire if they can pursue a property development business.  They want to propose such a business plan in seeking the nomination of a State and later invest in the real estate business in seeking an 888A permanent residence visa.

Buying property for investment

In relation to passive real estate investments, the simple answer is ‘no’.

Some people incorrectly think that passive investing in real estate for capital growth or rental return is acceptable for business migration to Australia.  Unfortunately, this does not satisfy regulations for the grant of any Australian visa.

While you are welcome to invest in Australian real estate, this does not attract State or Territory Government nomination or the grant of a 188 business visa, you still need an acceptable business plan for migration purposes.

How about construction as a business?

Where you have the qualifications and a background in building construction, a business plan to run a construction business is an acceptable proposal to a State or Territory seeking nomination for a 188A business visa.

How about real estate development as a business?

In relation to real estate development, the current message on the State of Queensland BSMQ website is that property development businesses will not be acceptable.

The message on the State of Victoria website is that small scale property developments are excluded.

Real estate development in New South Wales (NSW)

NSW is interesting. The answer is that certain expenditure in developing property can be counted towards your investment requirement in NSW.  In our view the guidance is also useful for anyone looking to invest in any other State or Territory.

However, you must ensure there are sufficient components of your investment that will be counted towards your subclass 888 permanent residence visa application on conclusion of your project.

Investment in property for ongoing operations acceptable in NSW

Your investment in property, plant, equipment and inventory for use of the ongoing operations of your business can be counted towards the business investment requirement in NSW.  For example, expenditure on fixed assets such as leasehold, property and land, renovations and improvements, furniture and fitout, vehicles, equipment and tools, and computer equipment, are acceptable business investment expenditures if not acquired as part of the purchase of an existing business.

Bear in mind what does not count when devising your business plan.

If your business plan or activity is to buy land for the purpose of building a residential or commercial property and selling the developed property, the “value of that land is not included in calculating the business investment requirement”.  Similarly, any “construction costs” in developing the property for sale and the value of any “unsold properties” do not count towards the business investment requirement in NSW.

Furthermore, cash, paid up capital and shareholder’s loans do not count.

Remember that where you purchase a business in NSW, the part of the purchase price specified for goodwill on the contract of sale of the business will count towards the business investment requirement but not any of the land, property and abovementioned fixed assets acquired with the business.  However, if the monetary value of goodwill is sufficiently large, your purchase and day to day operation of the business would get you across the line.

It is best to consult James Coelho, an experienced migration lawyer and the Principal of our firm.  For example, if you wanted to buy land to build a nursing home, motel, factory or other commercial building to run your business, we would be able to obtain nomination and visa approvals for you.  Further, we can provide you the legal service you require in your purchase, investment and commercial documentation.

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