As a foreign investor how much will I be able to borrow?

Any general questions you might have in regards to loans and finance.
Karl
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Joined: Thu Jan 31, 2019 5:53 pm

As a foreign investor how much will I be able to borrow?

Postby Karl » Thu Jan 31, 2019 5:56 pm

Hi, I am a German property investor interested in investing in the Australian property market for obvious reasons. I have high income and decent net worth. Realistically, how much will I be able to borrow?

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Otto Dargan
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Re: As a foreign investor how much will I be able to borrow?

Postby Otto Dargan » Thu Jan 31, 2019 7:32 pm

Hello Karl. Welcome to the forums.

For a foreign citizen, lending criteria are much stricter than it is for Australian citizens. Few Australian banks will lend to foreign investors as they consider this a complex, high-risk area.

In saying that, foreign property buyers can still qualify for a mortgage in Australia.

The caveat is that you will normally be charged a higher interest rate typically around 6.5% to 8.00% per annum (p.a.).

As a general rule:
  • You can borrow up to 70% of the property value of a new property in Australia with interest rates around 6.5% to 8%.
  • You can borrow up to 50% at interest rates below 5.00% if you have a high net worth and earn a primary/preferred currency.
  • Interest only loans are available with a maximum 5-year term.
  • If you live in Australia or you're married to an Australian citizen then you can potentially borrow more.
Please also note that:
  • Your income must be in an acceptable currency, otherwise, we cannot assist you.
  • Construction loans and vacant land are available at higher interest rates.
  • Foreign business income is only accepted by one or two lenders.
We are mortgage brokers that specialise in financing Australian real estate purchases by foreigners. Please call us on 1300 889 743 or you can fill in our free assessment form.

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

Karl
Posts: 4
Joined: Thu Jan 31, 2019 5:53 pm

Re: As a foreign investor how much will I be able to borrow?

Postby Karl » Thu Jan 31, 2019 10:05 pm

Do I need approval from the Australian government to purchase a property there?

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Otto Dargan
Mortgage Specialist
Posts: 7600
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: As a foreign investor how much will I be able to borrow?

Postby Otto Dargan » Thu Jan 31, 2019 10:53 pm

Hi Karl,

Yes, Foreign Investment Review Board (FIRB) approval is required for foreign citizens buying real estate in Australia.

You can apply for FIRB approval by submitting your application to the Foreign Investment Review Board (find out more information here).

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

Karl
Posts: 4
Joined: Thu Jan 31, 2019 5:53 pm

Re: As a foreign investor how much will I be able to borrow?

Postby Karl » Thu Jan 31, 2019 11:16 pm

What are some of the fees and taxes levied on foreign investors?

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Otto Dargan
Mortgage Specialist
Posts: 7600
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: As a foreign investor how much will I be able to borrow?

Postby Otto Dargan » Thu Jan 31, 2019 11:54 pm

Hi Karl,

Some of the fees and levies include:

  • Stamp duty surcharge
    All states except NT apply a foreigner stamp duty surcharge. Calculate the foreign stamp duty surcharge for your property purchase with the stamp duty calculator.
  • Ghost Tax
    From 2017, foreigner property owners will be slugged with a minimum $5,000 per year levy for a property they either fail to occupy or lease out for at least 6 months of the year called the ghost tax. This only applies in certain states namely, QLD and VIC.
  • Federal Capital Gains Tax exemption has been scrapped.
    Since 1 July 2017, foreign investors have been subject to a 12.5% Capital Gains Tax or CGT (withholding tax) when selling properties over $ 750,000. Previously, they were exempt.

The government also introduced a 50% cap on foreign ownership of new developments effective 1 July 2017

We are mortgage brokers that specialise in getting foreign investors approved for a mortgage in Australia.. Please call us on 1300 889 743 or fill in our free assessment form to find out if you qualify.

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


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