Thousands of foreigners buy property in Australia every year. These properties may be purely for investment or may provide temporary Australian residents with a home while they holiday, work or visit the country short-term.
Applying for a home loan as a non-resident of Australia is a little different to the usual home loan application process. Let’s briefly look at some of the complex rules associated with non-resident home loans.
All purchasers of Australian property who are non-residents typically must apply for buying approval with the Foreign Investment Review Board (FIRB). To gain approval you must have a specific property in mind. Therefore, you can sign a contract of sale for a property, but you must stipulate in the contract that the sale is subject to ‘FIRB approval’. It is also recommended that you put ‘subject to finance’ in the contract until you gain home loan approval for the property.
Non-residents can buy established property for redevelopment, where an old building is demolished and a new property or properties are built. This type of property can be lived-in or used as an investment property.
Non-residents can also purchase established property for Australian-based staff to reside in, but the property must be sold after the Australian-based staff have finished using the property as accommodation. The property cannot be used as an investment. If a non-resident is seeking to purchase an investment property, they can buy new homes.
There are restrictions placed on the purchasing of an established property for investment or to reside in, and the purchasing of vacant land. If approval to purchase vacant land is granted, then building on that land must commence within a specified time.
There are various types of non-resident home loans on offer. These are offered to non-resident’s who come from various locations and who have varying residency statuses and visas. The most common non-residents are those who live outside of Australia, and who wish to invest in property. In this case, most home loan packages that are offered to Australians are available for non-residents. Interest rates and terms are often negotiable. You must, however, reside in a country where the tax legislation makes investing in Australia feasible. Some countries, for instance, have strict withholding taxes and exchange control conditions that can make buying a property in Australia very expensive. Therefore, if you’re a non-resident of Australia you need to check rulings in your country before buying property or before applying for a non-resident home loan.
The easiest way to apply for a non-resident home loan is to contact an Australian home loan or mortgage broker. These home loan brokers specialise in foreign investment, they understand Australian regulations and rulings and they can make the whole process of buying property in Australia as easy as possible.
Want to know more about a non-resident home loan? If so, then contact a non-resident specialist broker today and find out more.