Hong Kong investors can buy property in Australia!
Hong Kong investors were historically among the top property buyers in Australia. In recent times, it’s been tough for Hong Kong investors to qualify for a mortgage in Australia.
Hong Kong investors face lower barriers for investment in Australia compared with mainland Chinese citizens, including the lack of restrictions on capital and greater ease in proving the source of funds.
While interest from Hong Kong has typically focused on residential property, there is now greater appetite for commercial property.
Our largest banks have largely pulled out of lending to foreign investors altogether, driven by a tide of fraud and money laundering schemes.
Luckily, there are some non-banks that offer mortgages for Hong Kong investors but the lending policy is tough. Do you qualify?
How much can I borrow?
As a Hong Kong investor, you can borrow up to:
- 75% LVR up to a loan amount of $2,500,000
- 70% LVR up to a loan amount of $5,000,000
- 60% LVR for high rise or inner-city apartments
- Eligible loan amounts and LVRs vary depending on certain Sydney and Melbourne postcodes.
- If you live in Australia, depends on your visa type and remaining term, you may be eligible to borrow up to 90% LVR for owner-occupied purchase.
- If you’re married to an Australian citizen, there is possibility for you and your partner to borrow up to 95% LVR for owner-occupied purchase.
- Our best lender will shade your HKD income to 90% and the majority will take at 80%.
- Slightly higher interest rates may apply when applying with a specialist lender.
- Some lenders will use the tax rate of Hong Kong, as opposed to Australian tax rates, which can greatly improve your borrowing power.
How do I get approved?
- You’ll need to provide two forms of income verification such as recent payslips, an employment letter, a copy of your employment contract, six months salary credits and your tax returns for the last two years.
- You need to have a good history of making repayments on other loan facilities such as a credit card or a personal loan.
- You should apply with a lender that commonly works with foreign investors.
Are HK Dollars acceptable to Aussie banks?
There are a lot of Hong Kong investors, and Australian banks regularly deal with Hong Kong Dollars (HKD).
However, if you live in Hong Kong and earn in HKD, you are likely to get rejected for a home loan in Australia.
Fortunately, if you earn in HKD but not live in Hong Kong, we have a lender in our panel who will approve your loan.
What if I’m self-employed?
Self-employed borrowers may be able to borrow up to 80% of the property value with one of our lenders.
WIth one of our specialist lenders, you may still qualify if you’re able to provide any two of the following:
- 2 years personal and business tax returns or Notices of Assessment.
- 6 months’ business bank statement.
- Hong Kong’s equivalent Business Activity Statements (BAS)
- an accountant’s verification letter in lieu of tax returns
Do I have to pay a higher interest rate with a non-bank?
Since there are only a couple of lenders that can help Hong Kong investors, they tend to charge a slightly higher interest rate than the rate available to Australian citizens.
Will I have to pay the foreigner stamp duty surcharge?
Foreign stamp duty surcharge applies to Hong Kong investor depending on what state you want to purchase your property.
The rules around this may vary and certain conditions apply.
Do I need government approval?
When buying a property as a foreign national, you need to seek approval from the Foreign Investment Review Board (FIRB).
As long as you’re following the FIRB‘s rules, then it is highly likely that your investment will be approved.
Once you find a property, then you can sign the contract of sale with the condition that allows you to back out of the purchase if FIRB approval is not granted.
If you meet the guidelines provided by FIRB, then there are very few reasons that could cause your application to be declined.
Speak to a mortgage broker
Mortgages for Hong Kong investors are still available but you have to meet strict criteria and provide the right supporting documents when the banks ask for it.
Our mortgage brokers can properly assess your situation and help you to get approved.
Call us on 1300 889 743 or complete our free assessment form to discover how you can qualify for a home loan as a Hong Kong national.