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We can release equity from a property that you own in Australia but we cannot use a property overseas as security.

Is buying property overseas possible?

Many Australian residents choose to buy property in a foreign country to take advantage of capital growth trends or simply because they have a cultural connection to that nation.

Although lenders in Australia can’t fund your purchase outright, there are a few solutions available to you if you already own a property Down Under.


How does buying property overseas work?

Australian banks can’t take a foreign property as security for a home loan.

However, they can help you fund your future investment plans if you have an existing property with enough equity.

Having a good understanding of what you want to do when you have the funds is key.

Which bank can help me?

If you’ve already researched the property market or spoken with a real estate agent to get an understanding of the location you want to buy, you’ll need funds to complete the purchase.

Without your own savings, the next step is to speak to an Australian bank with international branches.

Your mortgage broker may be able to put you in touch with the local branch themselves.

There are also a number of non-Australian owned international banks that may be able to help you with finance.

It’s important you get in touch with the local branch of the country you’re looking to buy.

Find out what interest rates and mortgage terms they have available for your price range.

How much can I borrow?

One important thing to note is that some countries limit you to borrowing 80% of the property value or Loan to Value Ratio (LVR).

This borrowing limit is typical with a lot of countries, particularly those burned by the global financial crisis (GFC).

Australian banks are one of only a few institutions in the world to offer 105% investment loans by way of a guarantor arrangement with your parents.

With no guarantor, you can still go up to 95% or even 97% of the property value in Australia.

So because of this 80% LVR restriction that international banks have, you would need your own funds for a 20% deposit, plus an extra 3-5% of the property value to complete the purchase of the property.

These extra costs cover costs relating to stamp duty, conveyancing fees and other legal costs required to be paid when buying in that country.

These extra costs vary from country to country: some of them don’t charge stamp duty at all!

Call us on 1300 889 743 (+61 2 9194 1700 if you’re outside of Australia) or complete our free assessment form to discuss your plans in buying property overseas.

What if I already own a property in Australia?

If you already own a property in Australia and only have 60-70% remaining on the mortgage, you can actually use your equity for buying property overseas.

Your Australian lender won’t accept a foreign property as security outright but you can do a cash out with the help of your mortgage broker.

The broker will normally inform the bank that the cash out is for future investment purposes not necessarily for overseas investment.

In saying that, as long as you’re not borrowing more than 80% of the property value, you can usually get approved for the cash out.

Let’s say you own a property currently valued at $500,000 with $300,000 owing on the home loan.

Your LVR would be around 60%, way below the 80% restriction for accessing equity.

The property you want to buy is in Brazil and it’s worth $250,000 – the 20% deposit (plus purchase costs) you need would be about $60,000.

By refinancing with your existing lender, you can cash out that $60,000 so your new home loan is $360,000.

Should I refinance to another lender?

By speaking with an experienced mortgage broker that has a number of different Australian lenders to choose from, they can properly assess your situation and refinance your mortgage to another lender at a lower interest rate.

When buying property overseas, it helps to have a mortgage broker that will support you going forward.

Call us on 1300 889 743 or complete our free assessment form to find out if you’re in a position to use equity in your property for buying property overseas.

Why do you want to buy property overseas?

Many Australians choose to buy property overseas because they’ve become disillusioned with the overpriced real estate market.

With a strong dollar compared to the currency of many foreign nations, there is the potential to take advantage of comparatively lower property prices and higher growth rates in developing nations.

The first thing you should consider is what countries you’d like to invest in: not all property markets are created equal.

Despite its large economy, the United States real estate market has been in the doldrums for a number of years following the GFC.

Meanwhile, some countries that would be considered developing nations or those badly hit by the global financial crisis (GFC) such as Greece, Brazil, Turkey and Italy are running at much higher growth rates.

Of course, there are investment opportunities anywhere if you’ve done your market research.

Discover more about the risks of overseas property investing in the ‘6 Traps Of Overseas Property Investing’ blog.

Australian residents who are foreigners choose to buy property overseas for investment purposes but they may also have a cultural or family connection.

When they go on holidays or even retire, they may choose to go back and make the property their new home, rent-free.


Buying property overseas: tax FAQs

As you consider buying property overseas, you should speak to a qualified accountant about your plans.

There are a number of tax implications when investing across borders and they can get quite complex.

Taking advantage of tax benefits will help you build a strong investment portfolio over the long-term.

Do I need to tell the ATO?

You don’t need to inform the Australian Taxation Office (ATO) that you’re buying property overseas but you need to disclose that you did so in your next tax return.

This disclosure will cover things like the rental income you earned and your expenses including any capital gains tax (CGT) gains or losses.

When you take into account the double tax agreements (DTA) in place with Australia and a number of different nations and the powers that the ATO has to track and punish tax-dodgers, it’s recommended you be honest to avoid huge fines.

Check out the ‘Rental income from overseas property’ and ‘Capital gains on overseas assets’ for important information.

What is a double tax agreement?

In many cases, both Australia and the country in which the property is located have taxing rights over rental income.

In a DTA arrangement, Australia’s foreign income tax offset (FITO) system means the tax payable on rental income is reduced if you’ve already paid foreign tax for the same income.

In other cases, the DTA may grant exclusive rights to the country in which the property resides to tax rental income and CGT, exempting you from tax in Australia.

In Australia, standard CGT requirements apply when selling property overseas, so check out the ‘What Is Capital Gains Tax?’ page for more information.

You should speak to your accountant about whether you’re better off paying tax on rental income or CGT in the foreign country or Australia.

What about foreign exchange?

Foreign exchange rates can be really detrimental to any significant capital gains you made in an overseas real estate market.

It can also be quite complex and can come with a whole host of fees when transferring funds (like rental income or sales proceeds) to and from Australia.

In some cases, you may be better off setting up a bank account in the foreign country.

It’s important to speak to your accountant about this.

What about foreign exchange controls?

There are no foreign exchange controls for transferring funds out of Australia that you need to worry about.

This is really helpful when transferring your deposit overseas.

However, there may be foreign exchange controls in the country you’re investing in.

These controls include fixed exchange rates and restrictions on the amount of currency that can be imported.

Countries with exchange controls are known as “Article 14 countries” and most common in poorer countries even after free trade and globalisation exploded in the 1990s.

They are very few and far between these days but some of these countries include:

  • China
  • Cuba.
  • Egypt.
  • Iran.
  • Malaysia.
  • Pakistan.

Can I claim tax deductions in Australia?

Any outgoings to repair or claim depreciation on overseas investment property are tax-deductible in Australia against the rental income.

What’s not tax-deductible are improvements to the property that are for cosmetic purposes such as extensions or fitting out a new kitchen. These are capital expenses and not necessary for the building itself.

You should check with the local tax jurisdiction as to what you can claim on tax because it may not necessarily be the same as Australia.

Negative gearing

Since 1 July 2008, any net foreign loss incurred may be offset against any Australian or overseas income.

In the past, you could only offset against foreign income.

Do you need help buying a property overseas?

If you have an existing mortgage in Australia and want to know if you can cash out to invest in real estate offshore, call us on 1300 889 743 or fill in our online assessment form to find out how our mortgage brokers can help.

Buying property overseas is possible with a little creativity and help from an expert.

  • Robin Wavite

    Hi there, I am an Australian Permanent Resident. I am looking at an expanding my residential real estate in Papua New Guinea (PNG) by buying another investment property in Port Moresby, Papua New Guinea worth K300,000. However, I could not easily secure a home loan directly overseas (PNG) because I am currently employed in Australia. Can you assist me through Westpac branches in PNG? My current property in PNG is valued at K328,000. Please assist me as I certainly need to secure this opportunity because Port Moresby is developing rapidly and is anticipated to become next Dubai in few years time. Hear from you soon. Cheers, Robin Wavite

  • Hi Robin,
    I visited PNG last year and it was an interesting place. We work with a lot of Australians who work as FIFO workers in mining in PNG as well so I know what you mean.
    Unfortunately we cannot use a property in PNG as security for a loan. However we can use Australian property as security for a loan in AUD to buy a property in PNG. Do you own any properties in Aus?

  • Robin Wavite

    Hello, thanks for the reply. No, I don’t have an Australian property yet. I was more interested in seeing if you can hook me up with a Westpac home loan person in Australia where they can liaise with their PNG counter part for my loan. Because that’s what I read from your website.
    Hear from you soon.

    Cheers, Robin Wavite

  • Hi Robin
    Unfortunately this isn’t something we can assist with. Westpac in PNG is a separate company to Westpac in Australia. You’d need to contact Westpac PNG or you may try ANZ PNG as they have a branch there as well.

  • Ulfric

    Can I use the equity from my current property in Melbourne to buy a house in the UK?

  • Hey Ulfric,

    If you only have 60-70% remaining on the mortgage then you can actually use your equity for buying property overseas. Note that your Australian lender won’t accept a foreign property as security outright but you can do a cash out with the help of your mortgage broker. The broker will normally inform the bank that the cash out is for future investment purposes not necessarily for overseas investment. In saying that, as long as you’re not borrowing more than 80% of the property value, you can usually get approved for the cash out. Please feel free to contact us to discuss in detail.

  • Oberg698

    Whoa, we can go up to 97% even without a guarantor… How does that work?

  • Hey there,

    When you borrow 97%, it actually means that you’re borrowing 95% with the cost of LMI added or capitalised on top your mortgage. So although you won’t avoid LMI completely, you won’t need to pay the LMI upfront and it will be paid off with your normal mortgage repayments at no interest. So you won’t need a big deposit to complete the investment because you’ll be saving thousands upfront.

  • Luke Neale

    Hi I have a property on the Gold Coast, and am looking to buy a property in New Zealand where I am from. What’s the easiest way to achieve this?

  • Hi Luke,
    We can refinance your property in the Gold Coast and release equity to assist you to buy the property in NZ. In NZ at the moment most banks lend a maximum of 60% of the property value if the property is being used for investment purposes so it may be best to borrow a large amount in Australia.
    We can assist you with the Australian finance but not with the NZ finance. It’s best to contact a NZ mortgage broker to get help with the second part.
    Please contact us if you’d like our help https://www.homeloanexperts.com.au/free-quote/

  • Marshall

    Hi there, we are looking at buying a 3bed house with a cafe & bottle shop attached with it in NZ & just wondered if it would be easier to borrow against our house in oz or sell? House in oz is valued at $430k but owe $200k. NZ pad is up for $435k. Any advice appreciated

  • Hi Marshall
    You can refinance your property in Aus for up to 90% of the value ($389k). This would release approx $189k that you could put towards your property in NZ. I can’t be sure if that would be enough of a deposit in NZ, you’d need to task a NZ bank.
    For an unusual property that is mixed residential and commercial https://www.homeloanexperts.com.au/property-types/mixed-use-property-loans/ it is likely that the bank will want a bigger deposit. So you may need to consider buying another property instead.

  • Pat

    Hi, I am an Australian resident and currently own a property outright in the U.S. Am I able to use the equity and income from my property in the U.S to purchase a property in Australia?

    Thanks in advance for any advice.

  • Hi Pat,
    You’d need to approach a US lender or mortgage broker to release the equity. Once you have done that then we can assist you to buy a property in Australia.

  • Lou

    Hi, I am a UK citizen living in Australia, I wish to buy a block of land in the UK with a view to building on it next year when returning from Australia. Would it be better to try and obtain an overseas mortgage here in Australia or try to get a mortgage in the UK and prove financial eligibility and pay for the mortgage repayments by international transfer each month? Thank you

  • Hi Lou,
    You’d need to apply with a UK mortgage broker. I’d say it would be difficult to get approved while living in Australia and much easier when you return. However I’n not an expert in the UK mortgage market so best to contact someone who is. We’re specialists in Australian mortgages only. Australian lenders cannot lend for a property in the UK.

  • Trent Stephens

    Hi, I am an Australian citizen and would like to buy a property in New Zealand. I am a first home buyer and live in Sydney. I want a holiday place that I’ll visit about 8 weeks a year. I have a fairly big deposit saved if I were to buy in Sydney but I understand I can only borrow 60% in NZ as it’s deamed an investment. Can I a borrow from an Australian bank to top up my deposit to by and more expensive home in NZ?

  • Sorry, we don’t offer services that include buying property elsewhere other than in Australia. We’re also not sure if that can be done so we recommended that you discuss this with a solicitor or a bank directly.

  • Kevin Toussaint

    Hello, I am a US citizen interested in purchasing a home in NZ. I’m not currently residing in NZ nor do I have a working permit. What are my chances of obtaining a loan from a NZ bank?

  • Hi Kevin,
    I’d say that it would be a struggle at the moment as they’ve put restrictions on foreign investors. We’re in Australia and unfortunately in 1901 NZ made the disastrous decision not to join our glorious nation. As a result, I’m unable to advise about NZ mortgages as it’s outside of my area of expertise.
    I’d recommend that you contact Squirrel Mortgages in NZ as they’re an expert in this area.