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Investing in property as a non-resident
Here’s what foreign buyers need to know about investing in Australian property.
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The Australian residential property market has been a popular destination for foreign investors for many years. But buying property as a foreign buyer comes with extra rules and regulations that you'll need to follow.
This page will break down the rules for foreign investors, the role of the Foreign Investment Review Board (FIRB) and the application process, plus some tips on how to finance your purchase.
Can foreigners buy property in Australia?
Yes. Non-Australians can buy property in Australia as investments. In Australia, foreign property purchases are regulated and there are limitations in place. Foreign buyers must apply for approval through the FIRB before buying residential real estate.
According to the FIRB website "The Government's policy is to channel foreign investment into new dwellings as this creates additional jobs in the construction industry and helps support economic growth. It can also increase government revenues, in the form of stamp duties and other taxes, and from the overall higher economic growth that flows from additional investment."
In other words, Australia's foreign property investment rules encourage foreign buyers to purchase new buildings and therefore stimulate the construction of new housing.
Purchasing new and established dwellings
It's much easier for foreign investors to buy new buildings or vacant land (provided you construct a property on the land). You will need to apply through FIRB, but there's much less scrutiny.
- New buildings. There are generally no conditions attached when purchasing a new dwelling.
- Vacant land. If buying vacant land, the main condition is that you need to complete construction of a dwelling on the land within four years. You can't just buy vacant land and hold it.
It's a different story with established dwellings (that is, buildings that are not new). Foreign investors can't get approval to buy established dwellings except in the following cases:
- Buying a home to live in as a temporary resident. You're allowed to purchase a home to live in if you're a temporary Australian resident. You have to sell it once you leave, unless you become a permanent resident or citizen.
- Buying an established dwelling to demolish it and develop more dwellings. Because the aim of the foreign investment regime is to encourage housing construction, you can apply to purchase an existing dwelling if you're planning to demolish and build new housing. The condition is that you should be building more dwellings than were originally there. For example, you buy a house on a large block then demolish it and build two townhouses.
How does the FIRB application process work?
Before you apply for approval to purchase an investment property, it's recommended that you obtain expert legal advice to make sure you understand and comply with all the necessary legal requirements. Then you can follow the steps below to apply for foreign investment approval:
- Check the FIRB website to read the guidance and check if you need FIRB approval.
- Visit the ATO website and click on "Start your application".
- Fill out the application form with your contact details, passport, visa documents and any previous FIRB application reference numbers.
- Provide the address and title details of the property you wish to purchase.
- Read and sign the declaration.
- Submit the application and pay the relevant fee.
- A decision on your application is usually made within 30 days and you will be informed of that decision within 10 days.
Application fees are as follows
You will also need to pay an application fee as per the table below:
| Purchase price | Fee payable |
|---|---|
| $1 million or less | $5,700 |
| $1 million - $1,999,999 | $11,500 |
| $2 million - $2,999,999 | $23,100 |
| $3 million - $3,999,999 | $34,600 |
| $4 million - $4,999,999 | $46,200 |
| $5 million - $5,999,999 | $57,700 |
| $6 million - $6,999,999 | $69,300 |
| $7 million - $7,999,999 | $80,900 |
| $8 million - $8,999,999 | $92,600 |
| $9 million - $9,999,999 | $104,100 |
Source: Foreign Investment Review Board. Details are correct at time of publication.
For purchases above $9,999,999 you will need to contact the Australian Tax Office to get an estimate.
You must obtain approval from the FIRB before you can apply for a home loan with an Australian lender.
Penalties for breaking rules on foreign investment
There are serious potential penalties for breaching Australia's rules on foreign investment. Acquiring property without FIRB approval can involve fines of up to $157,000 or up to three years in prison. There are higher penalties for foreign companies breaching these rules.
Home loan restrictions
If you need a home loan to cover your purchasing costs it's important to compare loans and lenders carefully. Many Australian lenders impose tighter lending criteria on foreign buyers. This can include:
- A lower loan-to-value ratio (LVR). LVR refers to your deposit size relative to the price of the property. You may need a larger deposit (around 30-40%) to qualify for a mortgage.
- A higher interest rate. A lender may only offer a loan for your investment with a higher interest rate than the lowest rates on the market.
- Restrictions on foreign income. Some lenders won't accept loan applications from temporary residents unless they earn an income in Australia.
If you want to get a home loan for your foreign investment you should approach lenders and ask directly about borrowing as a foreign investor. You could also focus on international banks which operate in Australia, such as HSBC or Citibank.
Speaking to a local mortgage broker is also a good idea.
Don't forget your tax obligations
Finally, it’s also worth remembering that there are tax implications for investing in Australian property. Any rental income you receive from your investment will need to be declared on an Australian tax return. You will need to pay Capital Gains Tax on any profit you make when selling the property.
What if I’m an Australian resident living abroad?
If you’re an Australian resident temporarily living overseas and you want to buy an investment property in Australia, the good news is that the strict foreign investment laws don’t affect you. You are exempt from needing FIRB approval in a range of circumstances, including if you:
- Are an Australian or New Zealand citizen.
- Hold an Australian permanent resident visa.
- Have a spouse who fits into either of the above categories and the property is being purchased in both names as joint tenants.
However, you’ll need to check whether lending restrictions imposed by the banks will have an impact on your ability to qualify for a home loan. This will depend on your residency status and the lender with which you apply for a loan.
Using foreign income to invest in Australian property is a complex and confusing topic. So it’s recommended that you seek legal and taxation advice to make sure you satisfy all regulatory requirements.
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Ask an Expert
Hi,
If I purchase a property in Aus and pay for it in full can I then rent it out?
Hi Treena,
Thanks for your comment and I hope you are doing well. Yes, you can rent out your property in Australia. Note that any rental income you receive from your investment will need to be declared on an Australian tax return, while you’ll need to pay Capital Gains Tax on any profit you make when selling the property.
Hope this helps and feel free to reach out to us again for further assistance.
Best,
Nikki
Hi, my nephew is an international student who is currently studying at University. Is he eligible for buying a property in Australia and is it possible that property can be under his parents’ name?
Hi T. Tran,
Thanks for your message. Yes, it is possible for your nephew to buy a property in Australia and make it under his parent’s name. Also, it’s easier if it’s a home to live in. If it’s an investment property then you have to get approval from the Foreign Investment Review Board (FIRB). Please see above the conditions for FIRB.
Hope this helps!
Best,
Nikki
My partner and I are looking to purchase our first property in NSW. Her father, who is Japanese, has offered to purchase a property on our behalf – jointly with my partner. The property would be around 550k My partner is now an AUS perm resident and I am a citizen. If he does purchase the property jointly with his daughter who is an aus perm resident does he have to get FIRB approval and pay stamp duty including the surchage?
Hi Kenneth,
Thanks for your inquiry.
It’s great to know that you are looking to purchase a property! As stated on the FIRB website on Residential Real Estate, foreign persons purchasing property as joint tenants with their Australian citizen spouse, New Zealand citizen spouse, or Australian permanent resident spouse doesn’t need FIRB approval. This exemption does not include purchasing property as tenants in common.
As for parents, looks like in doesn’t count in this situation. We suggest seeking advise from the FIRB directly to obtain information on this.
Hope this clarifies!
Best,
Nikki
Hi Kenneth,
Thanks for your inquiry.
It’s great to know that you are looking to purchase a property! As stated on the FIRB website on Residential Real Estate, foreign persons purchasing property as joint tenants with their Australian citizen spouse, New Zealand citizen spouse, or Australian permanent resident spouse doesn’t need FIRB approval. This exemption does not include purchasing property as tenants in common.
As for parents, looks like in doesn’t count in this situation. We suggest seeking advise from the FIRB directly to obtain information on this.
Hope this clarifies!
Best,
Nikki
If a Chinese resident and investor want to purchase an established Australian tourist accommodation property valued at under 3 million what do they need to do to acquire this property.
Hi Pam,
Thanks for your inquiry.
For foreign investors/residents wanting to purchase a property in Australia, the good news is that the strict foreign investment laws don’t affect you. You are exempt from needing FIRB approval in a range of circumstances, including if you:
Are an Australian or New Zealand citizen
Hold an Australian permanent resident visa
Have a spouse who fits into either of the above categories and the property is being purchased in both names as joint tenants
If you are looking to get a loan for your investment, you’ll need to check whether lending restrictions imposed by the banks will have an impact on your ability to qualify for a home loan. This will depend on your residency status and the lender with which you apply for a loan. This may make it difficult for you to invest in property in Australia, so get to know the rules and regulations before buying.
As a friendly reminder, seek legal and taxation advice to make sure you satisfy all regulatory requirements.
Hope this was helpful. Don’t hesitate to message us back if you have more questions.
Best,
Nikki
Hi
Am an Australian citizen working and living in Saudi Arabia for over 9 years now. Just wondering if I could buy a land or a house while living overseas. I have enough bank balance with an Australian bank so I dont need to apply for a loan. I just would love to have some information on how could I go about that, thanks.
Regards
MMK
Hi MMK,
Thanks for getting in touch! You are most welcome to buy property in Australia even if you are a foreigner – note that properties must only be new properties, off-the-plan apartments, and vacant land. If you’re a non-resident foreigner and you want to buy any residential property in Australia, you will first need to obtain approval from FIRB. You can apply for approval online and, while there is no limit to the number of new dwellings you can purchase, you will usually need to apply for approval before each purchase.
Look through the information above that says “The FIRB application process” to get started.Hope this was helpful. Don’t hesitate to message us back if you have more questions.
Best,
Nikki
Hi, I’m an Australian citizen living as an expat in Singapore and would like to know the law relating to the purchase of either 1) an investment property 2) a personal property. The purchase would be in cash.
Could you also advise payable stamp duty, capital gains tax and any other tax or statutory laws I should be aware of.
Thanks
Hi Jonathan,
Thanks for reaching out.
Actually, there’s not really a hard-fast rule or laws for expatriates buying a property (either investment or residential) in Australia. Since you’re still considered to be an Australian citizen, you should not find it hard to buy a property in Australia. Although the process is the same when applying while you’re in the country, some lenders would need more documentation from you like a Registered and Enduring Power of Attorney. Basically, a mortgage broker can help in finding a suitable lender for you. They will also advise you what are the things to be done and help with the paperwork.
You may also refer to our article about Australian expat home loans which you may find useful.
Meantime, I can’t really be more specific on taxes as I’m not a property tax expert though, but you can click on the following if you want to know more about taxes:
Please note though that taxes are more state-specific, so the laws governing this would entirely depend on where your property is located. So best to check directly with the state revenue office and accountant about any tax implications.
Hope this has helped.
Cheers,
May
Hi, I am a doctor on 457 work visa. I have applied PR but it may take up to 12-15 months. I am looking into purchasing a big block of land with a small bungalow on it. One of my friends advised if I choose to create a family trust(?? or a company) and buy under that, I can avoid FIBR. Is that true?
Hi Andey,
Thank you for getting in touch with Finder.
I am afraid that the answer is no. As per FIRB’s guidance note 5, “Australia’s foreign investment framework imposes strict rules around the purchase of residential real estate. The use of Australian corporations, Australian domiciled trusts, or trustees who are Australian citizens or Australian corporations, does not allow foreign persons to avoid these rules.”
It is best for you to speak to someone from the said government department and a mortgage broker/real estate agent for further assistance on purchasing a property.
I hope this helps.
Please feel free to reach out to us if you have any other enquiries.
Thank you and have a wonderful day!
Cheers,
Jeni
Hi,
My wife and I currently live in Australia on Bridging visas until such time as our permanent residence is approved. Do the same laws, regarding the purchase of an investment property, apply to us as to those people living overseas? In other words would we still be obliged to apply to FIRB and also pay the additional stamp duty?
Hi Neil,
Thank you for contacting Finder.
If you’re thinking of purchasing a property in Australia, you may need FIRB approval if you are a temporary resident or a foreign investor. You are considered a temporary resident if you hold a temporary visa that allows you to stay in Australia for 12 months or if you hold a bridging visa and have completed a permanent residency application.
I hope this helps. Should you have further questions, please don’t hesitate to reach out again.
Have a wonderful day!
Cheers,
Loraine
I am an Indian citizen married to Australian citizen . I wish to buy a house in Australia either in my name or jointly ? Can I do that ? If yes what’s the procedure . Thanks
Hi Vikram!
Thanks for getting in touch!
A non-resident can invest in a property in Australia however it can only be new properties, not established ones.
The first step in buying new properties is to seek approval from the Foreign Investment Review Board (FIRB). Failure to do so will face fines of up to $135,000, three years’ imprisonment or both.
Please refer to the information above regarding the The FIRB application process.
Hope this clarifies!
Regards,
Nikki
Hello, I live in Australia now as Guardian VISA to take care my children, who study in Australia as international students. (because they are under 18 years old).
In 2015, I bought the block of land in South Australia and I built the house in 2016 and to live in this house.
Now I want to move another place close to the high school and university. So I want to buy another house. Could you advise me, please:
1. Could I buy old dwelling house?
2. I have to pay a fee of 5,000AUD for applying with FIRB, besides, have I pay for any further fee for foreign buyers?
Hi Hieu,
Thanks for your message and for visiting finder – the leading comparison website & general information service built to give you advice in your buying decision needs. How are you doing today?
Below are the answers to your questions:
1. . Could I buy old dwelling house?
Under the new laws, non-resident buyers can only purchase new properties, not established ones. Non-residents who purchase property in Australia without first seeking approval from the Foreign Investment Review Board (FIRB) also face fines of up to $135,000, three years’ imprisonment or both. Companies breaching these rules can be fined up to $675,000, while buyers’ agents and real estate agents who help foreign buyers violate these rules also face stiff penalties.
2. I have to pay a fee of 5,000AUD for applying with FIRB, besides, have I pay for any further fee for foreign buyers?
This fee is $5,000 for properties valued under $1 million, and $10,000 for properties over $1 million. It then increases by $10,000 for each additional million dollars in property value. Paying this fee does not guarantee that a buyer will be able to purchase the property.
Hope this helps! Feel free to message us anytime should you have further questions.
Best Regards,
Nikki