New Zealand Citizen Home Loan
Can NZ citizens buy property in Australia?
This page is for New Zealand citizens or New Zealand permanent residents (PR) living in either Australia or New Zealand, who would like to apply for a mortgage to invest in real estate in Australia.
The property must be in Australia so we cannot help you with buying a house in New Zealand from Australia.
Can I borrow in Australia?
The amount that you can borrow and the banks that will lend to you will vary depending on your situation:
- Living in Australia: New Zealand citizens living in Australia can borrow up to 95% of the property value.
- Non-NZ citizens living in Australia: Non-New Zealanders on a 461 visa can borrow up to 95% of the property value. Read more in the section below.
- Living in NZ: Some lenders will allow you to borrow up to 90% of the property value.
- Living in another country: You may be treated as a foreign investor and have your loan limited to 60% to 80% of the property value.
- Mortgage discount packages: One of our lenders can offer NZ citizens and NZ permanent residents the same professional package discounts that are available to Australian citizens.
Please call us on 1300 889 743 or complete our free assessment form to discover if you qualify for a New Zealand citizen home loan.
Do I qualify for a 461 visa home loan?
The New Zealand Citizen Family Relationship (Temporary) visa (subclass 461) allows non-New Zealanders to live and work in Australia for up to 5 years.
To qualify, you must be a part of the ‘family unit’ of a New Zealand citizen living and working in Australia on a temporary Special Category visa (subclass 444).
Alternatively, they could be travelling with you to Australia and will be granted a 444 visa on arrival.
Bear in mind, the bank will want you to be fully approved for the 461 visa when you apply for your home loan.
What does a ‘family member’ mean?
You could be related to the 444 visa holder in the follow ways:
- Married or in a de facto relationship.
- The child or step-child of either the NZ citizen or their partner.
This is one of the only ways that a foreign citizen can borrow up to 95% of the property value!
Will I pay a higher interest rate as an NZ citizen?
Some lenders charge a higher interest rate if you are not an Australian citizen.
This is particularly true if you are living in NZ or another country outside of Australia.
However, in most cases, we can get you the same interest rates as an Australian citizen, even if you are borrowing 95% of the property value!
Please call us on +61 2 9194 1700 from overseas, on 1300 889 743 from within Australia or complete our free assessment form and one of our specialist mortgage brokers will call you to discuss your options.
Is Australian government approval required?
No, Foreign Investment Review Board (FIRB) approval is not required for those with New Zealand citizenship who have been to Australia at least once.
This is because on arrival in Australia you are granted a Subclass 444 visa which means you are an Australian permanent resident.
So investing in Australian property from NZ is possible!
New Zealand permanent residents (i.e. not an Australian or NZ citizen) require FIRB approval as they do not have the ability to live in Australia permanently.
Why are so many NZ citizens investing in Australia?
In October 2016, the Reserve Bank of New Zealand put a ‘speed limit’ on their banks that has reduced the number of loans they can approve for investors who have less than a 40% of the purchase price as a deposit.
As a result, NZ property investors have increasingly turned to Australia because they can still buy a property with a small deposit.
What is the Non-Resident Withholding Tax (NRWT)?
If you’re living in NZ and paying interest to someone that lives outside of NZ then you may be liable to pay additional taxes.
This is a complex issue that you should discuss with your accountant.
For the purposes of investing in Australian property you either have to choose a lender who meets certain criteria so that you don’t have to pay the tax or be forced to pay the tax yourself.
If you had an interest rate of 4.00%, you’d effectively be paying 4.40% because of the tax.
In some cases, we can choose a lender that allows you to buy with a small deposit.
We can then refinance in 2-3 years time with a lender that meets the criteria so you can avoid paying the additional tax.
Be careful of stamp duty!
When New Zealand citizens arrive in Australia, they are automatically granted a special visa known as a Special Category Visa (Subclass 444).
This excludes you from having to pay a stamp duty surcharge or FPAD (foreign purchase additional duty).
This special visa expires if you’re outside of Australia when the Department of Immigration and Border Protection completes a Visa Entitlement Verification Online (VEVO) check.
To avoid the stamp duty surcharge, it’s important that you’re in the country at the time of settlement.
If you can’t be in Australia at the time of settlement, you may still be able to avoid the FPAD buying purchasing in a state that doesn’t apply the surcharge:
- Northern Territory
- South Australia
- Western Australia
Are new zealand citizens eligible for the First Home Owners Grant?
The Australian government’s First Home Owners Grant (FHOG) and other benefits are available for permanent residents, as if they were citizens of Australia.
The Australian Department of Immigration automatically grants New Zealanders living in Australia a Special Category Visa (SCV).
Because New Zealand citizens are considered to be permanent residents of Australia, they are eligible for the grant.
Please refer to your mortgage broker for information about which benefits are available in your state.
Do you need help with an Australian mortgage?
Please call us on +61 2 9194 1700 from overseas or on 1300 889 743 from within Australia.
Alternatively, complete our free assessment form and one of our Australian mortgage brokers will call you to discuss your situation.
Can I use equity in a property in NZ to buy in Australia?
It’s possible to borrow in New Zealand against a property that you own there and then use those funds as a deposit to buy a property in Australia.
- You can borrow up to 60% of the value of a NZ investment property.
- You can borrow up to 80% of the value of a NZ home, if you’re living in NZ.
- Borrowing more may be possible with specialist lenders at slightly higher interest rates.
- Please contact a mortgage broker in NZ to help you release equity.
To be clear, using equity in a NZ property will involve to separate home loans.
One is a refinance of your mortgage in NZ where you release equity and the other is a home loan in Australia to buy a property using the equity from your NZ property.
Once you’ve released the equity in your NZ property, you can contact us and we’ll help you to get approved for the remainder of the funds in Australia.
At the moment, the Reserve Bank of New Zealand (RBNZ) is limiting the amount they will allow banks to lend for investment due the rapid growth of the NZ real estate market.
This legislation may change in the future in which case you’ll be able to borrow at higher LVR.
Can I buy a home or investment property?
Your loan can be used for any kind of residential housing. This includes both a home to live in or an investment property in Australia.
You can also apply for a home loan to refinance your existing loan, release equity or build a property in Australia. Commercial mortgages are available on a case by case basis.
Am I required to buy a new property?
Other foreign citizens are required to buy a new property to comply with Australian legislation.
However, NZ citizens are allowed to buy vacant land and existing properties as well.
Which banks have the most competitive home loans?
Before you look at which lenders have the most competitive interest rates, you need to consider which can actually approve your mortgage!
There isn’t much point in applying if you’re only going to have your application declined and damage your credit file.
In particular, if you’re living in NZ or are borrowing over 80% of the purchase price of your property, then not every lender will approve your home loan.
For this reason we use different methodology to find you the right lender.
We know which banks have flexible lending criteria for NZ citizen customers.
This means that you may qualify for a home loan from a reputable bank and will not need to apply with specialist or non-conforming lenders.
Why do special rules apply for NZ citizens?
Some Australian banks view New Zealand citizens more favourably because our governments have joint agreements for trade, residency and legal purposes.
In addition to this, our countries share the same credit reporting system known as VedaScore via Veda Advantage.
For these reasons several banks see NZ citizens as low risk borrowers, even when compared to UK or USA citizens.
What if I am a NZ Permanent Resident?
This is more complicated as fewer banks will accept your application.
It will also depend on which country you are living in at the time of application. Please contact us to discuss your situation.
What documents will I need to provide?
To find you the best lender for your situation we’ll need to obtain the full details of your situation, including supporting documents such as bank statements, payslips and identification.
We can then work out which lenders will approve your home loan, and let you choose the most suitable mortgage out of those available from these banks.
Apply for an Australian mortgage!
We are mortgage brokers who specialise NZ citizen home loans.
We know which banks can accept your application and which offer the best interest rates for non-residents.
If you would like to buy a property in Australia, please call us on +61 2 9194 1700 if you’re overseas or on 1300 889 743 if you’re in Australia.
Better yet, you can complete our free assessment form wherever you are in the world and one of our specialist brokers will get back you.