Guidelines in Australia

1. Purchasing Process

1. HOUSE HUNTING

Search for your dream home. Inspect the property, the community and the area. Foreign investors are not allowed to buy existing homes.

2. FIRB APPROVAL

This usually takes up to two weeks from the date the application is lodged. Once you have exchanged the contract, forward a copy of the signed contract to the FIRB for approval.

3. CONTRACT SIGNING

you can put a holding deposit of 5% of land and building and sign the contract of sale. You should also check the laws and council requirements in your local area

4. LOAN APPLICATION

forward the contract of sale to your mortgage broker to proceed with the formal approval.

5. CONVEYANCER APPOINTMENT

Conveyancers must be licensed to operate in that state as your property. Their job is to complete searches on the property, manage the transfer of ownership and review the contract before you sign it.

6. CONSULATE IDENTIFICATION

If you are living overseas you may need to visit the Australian embassy or consulate to get identified or to have your loan contract witnessed.

7. STAMP DUTY PAYMENT

Settle the stamp duty and pay the remainder of land cost.

8. RECEIVING LAND TITLE AND APPLYING BUILDING PERMIT

Appoint a qualified building surveyor and deal with internal and external building structures in accordance with safety regulations and relevant building standards.

9. PROGRESSIVE PAYMENT

1. Base(10%) > 2. Frame(15%) > 3. Lock up(35%) > 4. Fixing(25%) > 5. Completion(10%)

6. MOVE-IN

Collect the keys, receive a copy of all relevant warranties and certificates as per your contract and move in!

2. Foreign Investment Review Board (FIRB)

Who needs FIRB approval?

Temporary residents

  • You can only buy one established dwelling and it must be to live in, however you will be required to sell it once you do not live there anymore.
  • You can buy an investment property, however it must be a new property or vacant land to build a new property.
  • You don’t need FIRB approval if you’re buying the property with an Australian citizen as joint tenants and you’re in a spousal relationship. This means it doesn’t apply to other relationships like business partners, mother/father and child, siblings, friends or relatives.

Foreign investors

  • The investment property must be a new property or vacant land to build a new property.
  • You can’t buy an established dwelling as an investment property.
  • They can buy a new property in their name and rent it out to their child that is on a temporary visa.
Fees can vary depending on the value of the residential property or land that you want to purchase:
Acquisition Price (AUD)Fee (AUD)
$0 - $1,000,000$5,700
$1,000,000 - $2,000,000$11,500
$2,000,000 - $3,000,000$23,100
$3,000,000 - $4,000,000$34,600
$4,000,000 - $5,000,000$46,200
$5,000,000 - $6,000,000$57,700
$6,000,000 - $7,000,000$69,300
$7,000,000 - $8,000,000$80,900
$8,000,000 - $9,000,000$92,600
$9,000,000 - $10,000,000$104,100
$10,000,000+Contact the
Australian Taxation Office
for a fee estimate

3. Loan Application Information

People who are receiving an income in a primary currency (e.g. CNY and HKD) tend to get interest rates similar to Australian citizens. The amount that you can borrow depends on the type of temporary visa that you hold:

  • 80% of the property value: Most temporary visa holders can apply for a mortgage if they are allowed to work in Australia for at least 12 months.
  • 90% of the property value: Some visa holders may be eligible to borrow up to 90% of the property value if they have a strong income, stable employment and longer term visa.
  • 95% of the property value: If you’re married to or defacto with an Australian citizen or permanent resident, regardless of your visa.

Australian lenders require that the currency of the home loan must match the currency of your income. If you are in the USA and buying a property in Australia then you can have a loan in United States Dollars (USD) but not in Euros. Some lenders will require you to have a banking relationship with them in both the United States and Australia. Typically this is for overseas investors buying a property in Australia. When applying for a foreign currency mortgage, you can only borrow a maximum of 60% of the property value.

With the Significant Investor Visa (188) , some lenders may be willing to waive these requirements so you can qualify for a mortgage in Australia and grow your property portfolio.

 

Registration fees: This is a government fee for registering your lender’s mortgage on the title of your property. If the vendor has a mortgage on the property then you may be charged to remove their mortgage, the cost of which will be reimbursed by the vendor at settlement.

    StateRegistration Fee
    NSW$143.50
    VIC$119.70 (paper) / $110.80 (electronic)
    SA$170.00
    ACT$153.00
    QLD$192.00
    WA$174.70
    TAS$138.51
    NT$149.00

    4. Loan Assessment Tips

    Get pre-approved

    The purchaser who can act the fastest to buy a property is usually the winner. A pre-approval means a lender has assessed your situation so it’s a good indication that they’ll issue a formal approval later when you find a property. If you’re pre-approved then you’re at a significant advantage over other buyers.

    Some lenders only do ‘system approvals’ where a human doesn’t actually assess your loan. Typically, these are instant pre-approvals and they aren’t worth the paper they’re written on unless you’re in a strong financial position.

    Tip: if you have a system pre-approval you must have a cooling off period to make sure you’re protected. 

    The lender can reject the property that you buy

    A pre-approval is about the lender accepting you as a borrower but they also need to accept the property you’re buying. If your property is in a poor condition, a high rise block of units, in a remote location, near high tension power lines or has any number of other problems then the lender may reject it. You can reduce your risk by emailing your mortgage broker with a link to the property on a real estate website. Ultimately, it’s the lender’s decision and if you commit to buy a property you should have a cooling off period to protect yourself. A cooling off period usually allows a purchaser to withdraw from the contract within a certain period of time for any reason.

    5. Taxes and Fees

    When you buy a property, you can expect to spend up to 5% of the contract price on government fees, duties and charges. So for a purchase of $500,000, there may be up to $25,000 of governmental costs involved in order to complete the purchase.

    The main government fees associated with buying a home are:

    • Purchase stamp duty: This is the largest expense. It’s a tax levied by your state government on all property purchases.
    • Transfer fee: This is a government fee for registering your name on the title of the property and removing the vendor’s name.
    Foreign citizens who want to buy or invest in residential property in Victoria (VIC), New South Wales (NSW), Queensland (QLD), South Australia (SA) and Western Australia (WA) will need to pay a stamp duty levy and, in some states, a land tax surcharge.We confirmed the below information with state government bodies but tax legislation is complicated and changes can occur. We recommend that you contact the government of the state that you’re buying in. If still in doubt, get financial advice from an accountant.
    New South Wales (NSW)
    Stamp DutyGeneralDutiable ValueDuty Threshold
    $0 - $14,000$1.25 for every $100 or part thereof
    $14,001 - $30,000$175 + $1.50 for every $100 or part thereof above $14,000
    $30,001 - $81,000$415 + $1.75 for every $100 or part thereof above $30,000
    $81,001 - $304,000$1,307 + $3.50 per $100 or part thereof above $81,000
    $304,001 - $1,013,000$9,112 + $4.50 per $100 or part thereof above $304,000
    $1,013,000 - $3,040,000$41,017 + $5.50 per $100 or part thereof above $1,013,000
    $3,040,000 +$152,502 + $7.00 per $100 or part thereof above $3,040,000
    AdditionalStamp Duty Surcharge 8%
    Land Tax Surcharge2%
    Land Transfer Fee$143.50
    Victoria (VIC)
    Stamp DutyGeneralDutiable ValueDuty Threshold
    $0 - $25,0001.40%
    $25,001 - $130,000$350 + 2.4% thereof above $25,000
    $130,001 - $960,000$2,870 + 6% thereof above $130,000
    $960,001 +5.50%
    Additional Stamp Duty Surcharge3%
    Land Tax Surcharge7%
    Land Transfer FeePaper Transaction; or$98.50 + $2.34 for every whole consideration (max. $3,609)
    Electronic Transaction$89.50 + $2.34 for every whole consideration (max. $3,600)
    South Australia (SA)
    Stamp DutyGeneralDutiable ValueDuty Threshold
    $0 - $12,000
    $1.00 for every $100 or part thereof
    $12,001 - $30,000$120 + $2.00 per $100 or part of $100 over $12,000
    $30,001 - $50,000
    $480 + $3.00 per $100 or part of $100 over $30,000
    $50,001 - $100,000
    $1,080 + $3.50 per $100 or part of $100 over $50,000
    $100,001 - $200,000
    $2,830 + $4.00 per $100 or part of $100 over $100,000
    $100,001 - $200,000
    $2,830 + $4.00 per $100 or part of $100 over $100,000
    $200,001 - $250,000
    $6,830 + $4.25 per $100 or part of $100 over $200,000
    $250,001 - $300,000$8,955 + $4.75 per $100 or part of $100 over $250,000
    $300,001 - $500,000$11,330 + $5.00 per $100 or part of $100 over $300,000
    $500,001 +$21,330 + $5.50 per $100 or part of $100 over $500,000
    Additional Stamp Duty Surcharge7%
    Land Tax Surcharge-
    Land Transfer FeeProperty ValueFee
    $0 - $5,000
    $170.00
    $5,000 - $20,000
    $190.00
    $20,000 - $40,000
    $208.00
    $40,000 - $50,000
    $293.00
    Above $50,000
    $293.00 + 86.50 / 10000
    Australian Capital Territory (ACT)
    Stamp DutyGeneralDutiable ValueDuty Threshold
    $0 - $200,000$20 or $1.20 per $100 or part thereof
    $200,001 - $300,000$2,400 + $2.20 per $100 or part thereof above $200,000
    $300,001 - $500,000$4,600 + $3.40 per $100 or part thereof above $300,000
    $500,001 - $750,000$11,400 + $4.32 per $100 or part thereof above $500,000
    $750,001 - $1,000,000$22,200 + $5.90 per $100 or part thereof above $750,000
    $1,000,001 - $1,454,999
    $36,950 + $6.40 per $100 or part thereof above $1,000,000
    $1,455,000 +$4.54 per $100 or part thereof
    AdditionalStamp Duty Surcharge -
    Land Tax Surcharge0.75%
    Land Transfer Fee$409
    Queensland (QLD)
    Stamp DutyGeneralDutiable ValueDuty Threshold
    $0 - $5,000
    -
    $5,001 - $75,000 
    $1,050 + $3.50 per $100 or part thereof above $75,000 
    $75,001  - $540,000
    $4,600 + $3.40 per $100 or part thereof above $300,000
    $540,001 -  $1,000,000 
    $17,325 + $4.50 per $100 or part thereof above $540,000
    $1,000,001 +
    $38,025 + $5.75 per $100 or part thereof above $1,000,000
    Additional
    (applies to
    freehold
    land taxable
    value
    $350,000+)
    Stamp Duty Surcharge 7%
    Land Tax Surcharge25%
    Land Transfer Fee $192.00 +  $36.00 for each $10,000 or part thereof above $180,000
    Western Australia (WA)
    Stamp DutyGeneralDutiable ValueDuty Threshold
    $ 0 - $80,000
    $1.9 Per $100 or part thereof
    $ 80,001 - $100,000
    $1,520 + $2.85 per $100 or part thereof above $  80,000
    $100,001 - $250,000$2,090 + $3.8 per $100 or part thereof above $100,000
    $250,001 - $500,000
    $7,790 + $4.75 per $100 or part thereof above $250,000
    $500,001 +$19,665 + $5.15 per $100 or part thereof above $500,000
    Additional Stamp Duty Surcharge7%
    Land Tax Surcharge-
    Land Transfer Fee$0 - $85,000$174.70
    $85,001 - $120,000$184.70
    $120,001 - $200,000$204.70
    $200,001 - $300,000$224.70
    $300,001 - $400,000$244.70
    $400,001 - $500,000$264.70
    $500,001 - $600,000$284.70
    $600,001 - $700,000$304.70
    $700,001 - $800,000$324.70
    $800,001 - $900,000$344.70
    $900,001 - $1,000,000$364.70
    $1,000,001 - $1,100,000$384.70
    $1,100,001 - $1,200,000$404.70
    $1,200,001 - $1,300,000$424.70
    $1,300,001 - $1,400,000$444.70
    $1,400,001 - $1,500,000$464.70
    $1,500,001 - $1,600,000$484.70
    $1,600,001 - $1,700,000$504.70
    $1,700,001 - $1,800,000$524.70
    $1,800,001 - $1,900,000$544.70
    $1,900,001 - $2,000,000$564.70
    $2,000,001+$564.70 + $20 per $100,000 or part thereof
    Tasmania (TAS)
    Stamp DutyGeneralDutiable ValueDuty Threshold
    $0 - $3,000$50
    $3,001 - $25,000$50 + $1.75 per $100 or part thereof above $3,000
    $25,001 - $75,000$435 + $2.25 per $100 or part thereof above $25,000
    $75,001 - $200,000$1,560 + $3.50 per $100 or part thereof above $75,000
    $200,001 - $375,000
    $5,935 + $4.00 per $100 or part thereof above $200,000
    $375,001 - $725,000$12,935 + $4.25 per $100 or part thereof above $375,000
    $725,001 +$27,810 + $4.50 for every $100 or part thereof above $725,000
    Additional Stamp Duty Surcharge3%
    Land Tax Surcharge-
    Land Transfer Fee$212.22
    Northern Territory (NT)
    Stamp DutyGeneralDutiable ValueDuty Threshold
    $0 - $525,000Duty = (0.06571441 x (Value / 1000 x 2 ) + (15 x Value / 1000)
    $525,001 - $3,000,0004.95%
    $3,000,001 - $5,000,0005.75%
    $5,000,001 +5.95%
    AdditionalStamp Duty Surcharge -
    Land Tax Surcharge-
    Land Transfer Fee$149

    Ghost tax

    The so-called ghost tax is a minimum $5,000 per year levy for property they either fail to occupy or lease out for at least six months of the year. For VIC and QLD, the ghost tax rate is 1.5% per annual based on the value of the land.

    6.

    If you’re buying the property as an investment and intending to rent out your property, you have two options. You can either manage the property yourself or you can use a property manager.

    Professional managing agents will look after every aspect of your tenancy. Their job includes collecting the rent, maintaining financial records, conducting regular property inspections, handling any disputes and arranging all repairs. Most property managers charge a percentage of the weekly rent as a management fee, usually around 5-10% (this is negotiable). You should also expect to pay additional one-off fees when they find a new tenant or negotiate an extension on the lease. Many property managers are reactive and do not increase the rent when the market rent increases. However, we recommend that you contact them once a year and ask them if the rent should be increased. If you have a good property manager, then they’ll be contacting you each year with a recommendation.

    Last but not least, please make sure that the managing agent you are interested in using is licensed by the Office of Fair Trading (or state equivalent) before you enter into any formal agreement. Their licence will be displayed in their office or on their website.