Buying Australian property if you’re a foreign investor, expat or visa holder
Buying property in Australia is an option even if you’re not an Australian citizen or resident, provided you comply with Australian foreign investment laws. There are many potential benefits of buying Australian property. Read on to find out everything you need to know, including how you can purchase Australian property and answers to FAQs.
Laws affecting foreign property investment in Australia
Permanent residents have the same rights as Australian citizens when it comes to purchasing property. If you’re not a permanent resident or citizen, there are some restrictions on the type of Australian property you can buy. However, provided you get approval from the Foreign Investment Review Board in Australia first, you can buy:
Brand new or ‘off the plan’ residential or commercial properties.
Vacant land with a view to development (provided you get approval from the Foreign Investment Review Board).
An existing residential or commercial premises, or established dwellings, provided you demolish it and build a new dwelling or commercial building on the land within four years.
Temporary residents can buy only one established dwelling to live in and cannot hold investment properties. If the temporary visa holder leaves Australia, the property must be sold within three months.
The benefits of investing in Australian property
There are many potential benefits of buying Australian residential and commercial property, including:
Residential property has a record of providing significant long-term capital growth over the past three decades. Unlike many other countries around the world, the Australian property market didn’t suffer a significant fall in prices during major economic events like the Global Financial Crisis or the recent COVID-19-induced recession.
Strong current demand for residential properties across Australia, particularly in major capital cities. In fact, there is a current housing supply shortage in Australia that may take a decade to resolve.
Strong, long-term population growth projections.
A history of strong economic performance. Prior to the recent COVID-19 restrictions, Australia achieved 29 years of unbroken economic growth (a world record). The Australian economy has bounced back since COVID-19 restrictions have eased.
A well-regulated lending market to help protect borrowers from unscrupulous lending practices.
How to invest in Australian property
Here are simple steps to follow to make buying Australian property as smooth as possible if you are a foreign investor.
Step 1: Obtain a finance pre-approval so you know the value of the property you can afford to buy. We can help you to find a suitable loan for your needs.
Step 2: Get Foreign Investment Approval to buy Australian property.
Step 3: Research the market for suitable properties.
Step 4: Make an offer and negotiate to buy the property you want.
Step 5: Sign a purchase contract, pay your deposit and let us know your settlement date.
FAQs about foreigners purchasing a residential property or investment property in Australia
What are the tax implications of buying Australian property for foreign investors?
You will have to lodge a tax return in Australia and pay tax on any investment property income you receive (e.g. tenant rent). However, you can deduct all of your eligible investment property expenses from your income to reduce your tax bill (e.g. loan interest and government charges).
You will have to pay a vacancy fee if you buy a residential property that isn’t rented out for more than six months each year.
You will also have to pay capital gains tax if you sell the building and make a profit on the property value.
What costs are involved with buying Australian property for foreign buyers?
Buying Australian real estate involves the following costs. Many of these costs also apply to Australian buyers:
Foreign Investment Review Board approval fees.
Building and pest inspection fees (highly recommended prior to purchase).
Loan establishment fees.
The property purchase price.
Legal fees for transferring the ownership of the property.
Stamp duty (a government tax that varies depending on where you buy your property).
How we can help
If you’re a self-employed foreign resident, temporary resident, Australian expat or visa holder and you’d like to arrange a home loan to buy Australian residential or commercial property, our experienced team can help.
If you'd like to purchase property on the Australian real estate market, contact us today to find out more!