Current status of foreign investment in Australia

Learn more about investing in Australian real estate & share your ideas with other investors.
Post Reply
User avatar
Otto Dargan
Mortgage Specialist
Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: Current status of foreign investment in Australia

Post by Otto Dargan »

Hello orru, welcome to the forums.

As a foreigner, if you’re planning on investing in Australian property, you’ll likely have to watch out for tough new penalties. Federal Treasurer Joe Hockey recently introduced new tough laws for foreign investment in Australian property, which may not bode well for some investors.

For example, if your breach any of the Foreign Investment Review Board (FIRB) rules, you may have to face up to 3 years’ imprisonment or upwards of $130,000 in penalties! The FIRB is the regulatory body which assesses applications from foreigners who’d like to invest in or buy a home here in Australia.

You may also have to pay a $5,000 ‘application fee’ to buy a property under $1 million and $10,000 for every million dollars in the purchase price. However, this may not be a huge issue because the Australian dollar is dropped right now so the real estate here is discounted.

Please note that this may only apply for foreign investment proposals after 1 December 2015.

The main thing you need to know right now is that your foreign investment proposal will now be overseen by the Australian Taxation Office (ATO). The ATO will also look over the collection of fees, upfront screening processes as well as the enforcement of the rules of the FIRB.

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

User avatar
Otto Dargan
Mortgage Specialist
Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: Current status of foreign investment in Australia

Post by Otto Dargan »

Hi orru,

Yes, if you want to take out a mortgage here in Australia itself, you can take out a foreigner home loan. As you’re a foreign citizen living outside of Australia, you may borrow only up to 80% of the property value.

However, if you can’t prove your income, you may borrow only up to 75% of the property value. Whatever the amount, you’ll need an approval from the FIRB first.

What’s great is that some lenders may offer you the same competitive professional packages as well as basic loan discounts that Australian citizens get.

If you’d like to know more about this, you can have a look at our website. You can also speak with one of our credit specialists directly by calling us on 1300 889 743 if you’re in Australia (+61 2 9194 1700 from outside of Australia) or you can fill in our free assessment form and one of us will contact you within 24 hours.

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

User avatar
Otto Dargan
Mortgage Specialist
Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: Current status of foreign investment in Australia

Post by Otto Dargan »

Hi daggy,

Even if you’re an Australian living overseas (expat), you may still be able to apply for an Australian mortgage.

You may be able to borrow up to:
  • 80% of the property value as long as you’re able to provide basic evidence of your income using documents such as payslips.
  • 95% of the property value if you can prove that you’re in a good financial position and that your employment is stable. You may be able to borrow up to 90% or even 95% but please note that you’ll likely have to pay Lenders Mortgage Insurance (LMI).
LMI is a one off fee charged by the lender when borrowing more than 80% of the property value and it protects the lender in case you’re unable to make the repayments.

If you want to learn more then you can browse through our website or call our office.

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

Post Reply