Buying an Investment Property in Australia for overseas buyers

Buying an Investment Property in Australia for overseas buyers

• Posted By Katrina Gaviola

 

1. Check Loan Eligibility:

 

• Ensure you can finance your purchase through an Australian lender.

• Expats may face challenges with lenders being more conservative, especially with foreign income.

• Lenders may only consider 80% of your income for loan approval due to currency risks.

 

2. Legal Requirements:

 

• Non-residents need approval from the Foreign Investment Review Board (FIRB) before purchasing property in Australia.

• Expats with non-citizen spouses must look into extra legal requirements, including potential tax implications and surcharges.

 

3. Assemble Your Team:

 

• Hire professionals such as a finance broker, buyer’s agent, conveyancer/solicitor, and property manager to guide you through the process.

 

4. Find an Investment-Grade Property:

 

• Look for A-grade properties in investment-grade locations with potential for capital growth.

• Conduct thorough research, inspections, and legal checks.

 

5. Purchasing the Property:

 

• Your team will handle negotiation, contract reviews, and ensure all legal terms are met.

• You’ll need to pay a deposit, undergo a cooling-off period, and settle the property within 30-90 days.

 

6. FIRB and ATO Approvals:

 

• You may need to obtain FIRB and ATO approval depending on your residency status and type of property.

 

7. Finalise Your Loan:

 

• Once approvals are secured, your mortgage broker will finalize your property loan.

 

8. Pre-Settlement Inspection:

 

• Ensure the property is in the same condition as when contracts were signed. Any repairs promised must be completed before settlement.

 

9. Final Settlement & Stamp Duty:

 

• Final settlement involves paying the remaining balance and exchanging title documents.

• Pay stamp duty, which varies by state, and if buying with a non-citizen spouse, additional foreign buyer surcharge applies.

 

10. Property Management:

 

• Engage a property manager to handle rent, tenant selection, maintenance, and compliance.

 

11. Tax Obligations:

 

• As an foreign investor, you’ll need to declare rental income, file Australian tax returns, and account for Capital Gains Tax (CGT) if selling the property.

 

Important Considerations:

 

• Non-residents must file applications with the FIRB and may face vacancy fees if the property is not rented for at least 183 days in a year.

• Expats may require a larger deposit due to tighter lending conditions but can still secure financing from major Australian banks and specialist lenders.

 

Please seek the professional for the right advice. It's for educational purposes only.