The past few years have seen thousands of Australians move to Dubai for career advancement and to enjoy a very different way of life.
But Aussie expats can’t shake their roots, especially when it comes to investing in Australia’s strong real estate market.
Find out how much you can borrow and how to get approved for home loan.
Can Australians in Dubai get a mortgage Down Under?
Australians in Dubai are considered Australian expatriates (expats), rather than a typical non-resident. That means they can apply for a home loan as if they are living in Australia!
How much can I borrow?
Australian expats in Dubai can borrow up to:
- 80% LVR: You’re limited to borrowing 80% if you can’t provide acceptable proof of your foreign income. This is also the case if you’re assessed as a foreigner and not an Aussie expat.
- 90% LVR: You can borrow up to 90% if you can prove that you’re in a strong financial position. This generally means a strong income and stable employment.
Our mortgage brokers specialise in Australian expat home loans.
Speak with one of our credit specialists by calling us on 1300 889 743 (+61 2 9194 1700 if you’re overseas) or by completing our free online assessment form.
How will the bank assess my foreign income?
Australian expats in Dubai won’t generally be paying income tax so providingtax returns is out of the question.
Instead, you’ll need to provide banks your two most recent payslips and a copy of your employment contract.
Some lenders may simply accept a letter from your employer if you’re borrowing less than 80% LVR.
My financial documents are in Arabic!
Most lenders won’t accept your financial documents unless they are written in English. So, you’ll need an interpreter’s certificate.
An interpreter’s certificate is an official and certified translation of the original financial document.
You can go to the Australian Consulate in Dubai to get an interpreter’s certificate.
Getting approval on an expat mortgage.
Even if you have a good income and you can prove it, some banks may not approve your mortgage. This is because banks don’t commonly deal with the United Arab Emirates Dirham (AED).
If you earn an income in a currency other than AED and it’s not on the Foreign Currency Mortgages page, you can still qualify. However, you may have to meet additional requirements such as being restricted to borrowing a maximum of 80% LVR.
Please keep in mind that Australian lending policy changes on a regular basis, particularly when it comes to which currencies will be accepted.
Deposit and genuine savings requirement
Standard lending policy dictates that you need a deposit of at least 5% of the property price that you’ve saved yourself over a period of 3-6 months.
This is known as “genuine savings”, although their other ways to meet this requirement so check out the genuine savings page for more information.
Luckily, this component doesn’t need to be genuine savings and can come from a lump sum or investment income.
So, in reality, you need closer to a 10% deposit, or up to $70,000 for a $700,000 property, as a minimum.
What if I don’t have a deposit?
You can also access equity from a property that you already own in Australia.
If you have a deposit but don’t meet genuine savings requirements, there are no genuine savings solutions as well.
What if I’m self employed?
If you’re self employed, you may not be able to provide your full financial statements.
Instead, you’ll need to provide tax returns and Business Activity Statements (BAS). Note that the tax returns must be for the last two years and BAS must be for the past 12 months.
If you can’t provide these documents, there are low doc mortgage solutions for Australians in Dubai.
Mortgages for Australians in Dubai FAQs.
What are the tax implications?
If you’re classed as a tax resident of Australia, your foreign income and any capital gains you make are subject to Australian tax law.
You can take the residency tests in the Australian Taxation Office (ATO) website to check whether or not you’re an Australian tax resident.
If you’re not an Australian tax resident, your investment income is still taxable in Australia.
Tax is generally withheld in Australia at the time of payment. However, if you receive rental income or have capital gains, you’ll have to declare them in an Australian tax return.
Australia tax law is complicated and may or may not be applicable to your particular situation. Before you decide on buying or investing in Australian property, speak with an accountant or a professional tax advisor.
Are there any property restrictions or mortgage limitations?
Even if you’re technically a non-resident, you’re not restricted to buying either a new property or vacant land. Australians in Dubai can buy commercial properties as well as existing property or established dwelling.
However, you may have to meet additional requirements depending on the type of property you’re buying.
Can I qualify for waived LMI?
Lenders normally charge Lenders Mortgage Insurance (LMI) when you’re borrowing more than 80% LVR. If you’re applying for a low doc loan then LMI will apply at 60% LVR.
Mortgage insurance can be thousands of dollars. The good news is that Australians in Dubai can qualify for waived LMI.
Banks prefer lending to particular professionals!
The main professions that can qualify for waived LMI are:
- Medical practitioners: This includes doctors in various medical fields.
- Legal professionals: This includes solicitors, barristers and lawyers.
- Mining engineers: This includes surveyors, geologists and geophysicists.
- Accountants: This includes actuaries, finance managers and auditors.
- Other high income professionals are assessed on a case by case basis.
If you’re one of the above professions, you may be eligible for waived LMI!
Our mortgage brokers specialise in expat mortgages and can negotiate with the lenders on your behalf.
You can call us on 1300 889 743 (+61 2 9194 1700 if you’re overseas) to discuss your situation and loan needs with one of our mortgage brokers. You can also complete our free online assessment form and one of us will contact you instead.