What are the rules around foreigners buying property in Australia?

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Huang
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Joined: Wed Jun 19, 2019 3:55 pm

What are the rules around foreigners buying property in Australia?

Postby Huang » Wed Jun 19, 2019 3:59 pm

I’ve found a property in Australia that may be worth investing in. I travel to Australia once every few years as my sister is married to an Aussie. I was told that the foreign buyer stamp duty and other government fees are quite high. What are the rules around foreigners buying property in Australia that I need to aware of?

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Otto Dargan
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Re: What are the rules around foreigners buying property in Australia?

Postby Otto Dargan » Wed Jun 19, 2019 4:40 pm

Hello Huang. Welcome to the forums.

Investing in Australian property has become very popular with overseas investors and Australian expats looking for strong returns and stability. We’ve created a handy little guide to buying property in Australia you can check out.

Foreign investors are typically not allowed to buy established houses, however, they can buy new properties, off-the-plan properties and vacant land.

First, when you’re looking to buy any residential property as a non-resident foreigner you’ll need to obtain FIRB approval (Foreign Investment Review Board). Applications to buy new dwellings are usually accepted after the fees are paid unconditionally, however, applications to purchase vacant land may be subject to a condition stipulating a timeframe in which conditions must begin.

Lastly, the foreign stamp duty surcharge or foreign buyers duty is an additional stamp duty that’s applied to foreign investors buying Australian property. You can use our foreign stamp duty calculator to get an estimate.

We can help you get approved for a mortgage to purchase a property in Australia.

Speak with one of our specialist mortgage brokers by giving us a call on 1300 889 743 ( +61 2 9194 1700 if you’re overseas) or by filling in our free assessment form to find out if you qualify for a non-resident mortgage.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Huang
Posts: 3
Joined: Wed Jun 19, 2019 3:55 pm

Re: What are the rules around foreigners buying property in Australia?

Postby Huang » Wed Jun 19, 2019 5:37 pm

Thanks for the information so far. I was specifically looking for information on vacant land with the intent to develop within two years. What specific FIRB conditions do I have to meet to purchase vacant land as a foreign citizen?

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Otto Dargan
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Re: What are the rules around foreigners buying property in Australia?

Postby Otto Dargan » Wed Jun 19, 2019 7:00 pm

Hi Huang,

Foreign citizens are generally allowed to purchase vacant land for development subject to a few FIRB conditions such as:
  • The development is completed within four years from the date of approval.
  • Evidence of completion of the dwelling/s is submitted within 30 days of being received usually in the form of a final occupancy or builder’s completion certificate.

Please note that vacant land that previously housed an established dwelling on the land would generally not be considered vacant land by FIRB.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Huang
Posts: 3
Joined: Wed Jun 19, 2019 3:55 pm

Re: What are the rules around foreigners buying property in Australia?

Postby Huang » Wed Jun 19, 2019 7:49 pm

That’s great. How does the borrowing power calculations differ from lenders in Hongkong? Is HKD an acceptable currency? Is the proposed rental income from the property taken into consideration for serviceability?

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Otto Dargan
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Joined: Sat Sep 06, 2008 5:55 pm
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Re: What are the rules around foreigners buying property in Australia?

Postby Otto Dargan » Wed Jun 19, 2019 8:53 pm

Hi Huang,

I would not be the right person to speak as to how Hongkong lenders calculate borrowing power. However, we have almost 40 Australian lenders on our panel and that’s who we deal with. You can use our borrowing power calculator to get an estimate. It uses a similar method to that used by Australian banks. The key to maximising your borrowing power is to apply with the right lender.

Hong Kong Dollars (HKD) along with the United States Dollar (USD) are among the preferred currencies for overseas investors.

Lenders typically only assess 80% of the rental income for serviceability to account for property repairs, maintenance and management. It should be noted that negative gearing benefits are not available to foreign investors and loaded repayments on foreign debts are taken into consideration.

We would need to perform a thorough assessment to find out if you qualify for a foreigner mortgage.

Speak with one of our specialist mortgage brokers by calling us on 1300 889 743 ( +61 2 9194 1700 if you’re overseas) or by filling in our free assessment form to discuss your situation.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts


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