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Here is a quick guide to foreigners buying real estate properties in Australia.
There are many reasons for foreigners to snap up Australian real estate properties. If you are a foreigner, you might do so because of these reasons:
Australian Real Estate has performed well over a long period, whereas other traditionally favourable investments such as US shares and European bonds have been much more volatile.
To diversify your investment portfolios beyond your home shores to hedge against the risks of potential home country political/financial instability.
To seek higher yields on real estate
A hedge against currency fluctuations
Wealth transfer or growth
To obtain a dwelling first in anticipation of a move to Australia further down the road
As a gift to your children or grandchildren
Personal use whilst in Australia
If you want to buy Australian properties as a foreign person, you'd need to follow these steps:
1. Obtain Foreign Investment Review Board (FIRB) approval
To purchase residential real estate in Australia, you must first obtain approval from Foreign Investment Review Board (FIRB). As per FIRB, a foreign person is a foreign non-resident or temporary resident. To apply for approval, visit https://firb.gov.au/apply-now
2. Understand your FIRB approval conditions
You are likely to receive your FIRB approval within 30 days. Take your time to understand the conditions in the approval letter. You must adhere to these conditions when you purchase your property and after settlement. If you do not comply with these conditions, you may be subjected to an infringement notice, civil penalty or criminal prosecution.
3. Record your property on the ATO Land and water
For residential properties, the Australian Tax Office (ATO) keeps details of these purchases of residential properties by foreign nationals on the ATO Land and water register. You are required to enter your purchased residential property on the ATO Land and water register within 30 days of settlement. This is normally a condition of your FIRB approval.
4. Lodge your annual Vacancy fee return
For residential dwellings, you are required to lodge an annual Vacancy fee return within 30 days of the end of every 12 month period you own it. In the Vacancy fee return, you need to tell us how the dwelling was used over the previous 12 months.
For more information on the Vacancy fee, see www.ato.gov.au/vacancyfee
What residential real estate properties can foreigners buy?
Under Australia’s foreign investment framework, in most instances, applications to purchase new residential real estate properties are usually approved without conditions. Applications to purchase vacant land are normally approved subject to construction being completed within four years (to prevent land banking). Once new dwellings are built or purchased, they may be rented out, sold, or retained for the foreign investor’s own use.
Established dwellings
Non-resident foreign persons are generally prohibited from purchasing established residential real estate properties in Australia. However, temporary residents can apply to purchase one established residential real estate property to use as a residence while they live in Australia. Temporary residents cannot acquire established properties to rent out or for use as a holiday home.
Home loans for foreigners buying real estate in Australia
With median prices for properties in Sydney exceeding well over AUD$1 million, foreigners buying real estate properties in Australia may wish to obtain a home loan to conserve cash flow, or to mitigate flow-of-capital restrictions in their home countries.
There are only a handful of lenders in Australia who will lend to foreigners and non-residents for the purchase of residential real estate. When dealing with a non-conforming mortgage, such as home loans for International Borrowers, speak to your specialist mortgage broker for clarity.
We are the mortgage brokers for International Borrowers
With the lenders on our panel, Fairlane Finance is able to obtain home loans of up to AUD$25 million for International Borrowers without Australian citizenship or visa.
To speak to our lending specialist on home loans for international borrowers, use the button below to book an appointment.
The information on this website is provided for general information only and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from financial, legal and taxation advisers. Although every effort has been made to verify the accuracy of the information, we disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy, or omission from the information or any loss or damage suffered by any person directly or indirectly through relying on this information.