Almost half of Australians living overseas are based in Europe.
The good news is that Australian expats in Europe can take out a home loan to buy or invest in Australian properties!
Find out how you can qualify for a mortgage Down Under even if you’re living and working overseas.
How much can I borrow?
As long as you can meet standard bank lending policy, Australians in Europe may be able to borrow up to:
- 80% of the property value: You’re generally limited to 80% Loan to Value Ratio (LVR) if you can’t prove acceptable documents that prove your foreign income such as payslips. This is also the case if you’re assessed as a foreigner by the bank.
- 90% of the property value: You may be able to borrow this amount if you have stable employment, a strong asset position and at least 5% in genuine savings. Australian lenders prefer borrowers with excellent saving habits.
You can discuss your situation and loan needs with one of our Australian expat home loan specialists by calling us on 1300 889 743 (+61 2 9194 1700 if you’re overseas) or by completing our free online assessment form today.
Will my currency be accepted?
It’s not uncommon for Australian banks to deal with home loan applications from Australians in Europe.
The most common currencies that the banks deal with include:
- Euro from Eurozone countries such as Ireland, France and Germany.
- Great Britain Pounds Sterling (GBP).
- Swiss Franc (CHF).
As long as you earn a living in Euro, GBP or CHF, Australians in Europe have a good chance of getting approved for an Aussie mortgage.
The following currencies are also accepted but there may be certain restrictions and conditions such as restricting your borrowing power to 80% of the property value:
- Swedish Krona (SEK).
- Russian Ruble (RUB).
- Norwegian Krone (NOK).
- Turkish Lira (TRY).
If you’re not living in a Eurozone country or you’re earning in a currency other than all of those mentioned above, you may not be able to qualify for a mortgage in Australia. The key, therefore, is to apply with the right lender.
How do lenders assess Australians in Europe?
Lenders treat home loan applications from Australians in Europe just like any other Aussie residing Down Under!
Even if you’re overseas, you can prove your foreign income by simply providing:
Some lenders can even accept a letter from your employer as proof of your income if you’re borrowing 80% LVR or less.
You won’t even need to get an approval from the Foreign Investment Review Board (FIRB) to buy or invest in Australian property.
However, your financial documents need to be in English. If they are in a foreign language, lenders may require you to provide an interpreter’s certificate, which you can generally get with the help of the Australian Consulate in your region.
You can also qualify for a home loan with the same interest rate as any other Aussie.
It’s important to note that some banks may not offer you the same interest rate discounts as people living in Australia if they assess you as a foreigner.
However, we can help negotiate a substantial interest rate discount that’s way below the Bank Standard Variable Rate (BSVR).
Australian tax law: what you need to know
Australia has a Double Taxation Agreement (DTA) with the following European countries:
- Czech Republic
- United Kingdom (UK)
The DTA basically protects borrowers from paying their taxes twice. Also, you won’t incur Capital Gains Tax (CGT) on any capital gain you may make when you sell Australian property.
If your country is not in the above list then your foreign income and any capital gains you make are subject to Australian tax law if you’re classed as a tax resident of Australia.
To check if you’re an Australian tax resident, you can take the residency test on the Australian Taxation Office (ATO) website.
However, even if you’re not an Australian tax resident, your investment income is still taxable in Australia.
For more information about the tax implications of buying property in Australia, you can check out the ATO website or the website of your country’s department that deals with tax issues.
Note that Australian tax law is complicated and may or may not apply to your situation. Please speak with an accountant or a professional tax advisor before deciding on buying or investing in Australian property.
Get help from an Australian expat specialist
Our mortgage brokers specialise in mortgages for Australians in Europe and other Australian expats.
Choosing the right lender is the key to getting approved for a home loan. Because we have relationships with almost 40 different lenders all over Australia, we can help you find and apply with the right lender for your particular situation and needs.
You can speak with one of our experienced mortgage brokers by calling us on 1300 889 743 (+61 2 9194 1700 if you’re overseas). You can also complete our free online assessment form and we’ll get back to you within 24 hours.