The Great Australian Dream has traditionally been a quarter acre block with a house on it. Your particular vision might vary, but there’s no denying the allure of Australian property.
However, as a non-resident it’s not exactly easy. You must be aware of tax obligations, including property tax and capital gains tax, which might differ from those for Australian residents. Despite the challenges, investing in Australian property can be worthwhile due to the stability of the market.
It's advisable to seek legal and financial advice to navigate the complexities of the Australian property market and lending practices.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.69% p.a. | 6.16% p.a. | $2,899 | Principal & Interest | Fixed | $0 | $530 | 90% |
| Disclosure | |||||||||||
5.99% p.a. | 5.90% p.a. | $2,995 | Principal & Interest | Variable | $0 | $0 | 80% |
| Promoted | Disclosure | ||||||||||
6.04% p.a. | 6.06% p.a. | $3,011 | Principal & Interest | Variable | $0 | $530 | 90% |
| Promoted | Disclosure |
Can foreigners get a home loan in Australia?
It’s doable, but most reputable lenders require you to be at least a permanent resident or citizen. The major banks - CommBank, NAB, Westpac, and ANZ - all have this requirement by rule, with some exceptions given, especially for New Zealanders.
Temporary skill shortage visa holders (482) may also be eligible, but the options will likely be limited.
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Lending Criteria for Non-Residents: Banks have stringent lending criteria for non-residents. This includes higher deposit requirements (often 30% or more), proof of stable income, and a good credit history.
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Interest Rates and Fees: Non-residents often face higher interest rates and additional fees. Comparing various lenders is crucial to find the best deal.
On top of the residency/citizenship requirement, if you manage to purchase a home you might also be classed as a foreign investor and have various extra considerations to make, including extra taxes and fees to pay. Non-residents are also permitted to buy only new dwellings, or existing dwellings only if their visa allows them to stay in the country at least 12 months.
Capital gains tax considerations
In Australia, the primary place of residence is not subject to capital gains tax if you’re an Australian citizen or permanent resident. If you’re a temporary resident, different rates apply.
The foreign resident capital gains withholding (FRCGW) policy applies to those disposing of taxable property, and currently stands at 12.5% if the property is worth more than $750,000.
Workarounds - applying with an Australian spouse
Home loans for 820/801 or 309/100 visa holders (temporary and provisional partner visas) may be possible with a range of lenders. If your partner is a citizen or permanent resident, has a strong record of income and savings, and proof of employment in Australia, you may be able to create a joint application.
Home loans for expats
The news is a bit better if you’re still an Australian citizen but living overseas; many banks and lenders will still write you a home loan. Applicants will likely need to show a strong history of stable employment, and even then, a lender might only consider a portion of this income. This is to cover for fluctuating exchange rates and the nature of employment being different overseas.
Photo by Nao Takabayashi on Unsplash
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