An Expat Guide to Buying Property in Australia
Unless you are married to an Australia or hold a permanent resident visa or special category visa, you are not entitled to buy a home in Australia. Expats in this position will need to apply to the Foreign Investment Review Board (FIRB). This process can take between 40 and 140 days and the majority of applications do get approved.
Forms for expats can be downloaded from the Foreign Investment Review Board website. When you fill in the forms you will be applying based on the address of the property you wish to buy. You cannot apply after you have purchased a property, you would have to sell it. Any contract you sign for a property must have been approved by the FIRB.
Each application costs AUS$5,000. This rises to AUS$10,000 for million-dollar properties and each million over this.
Property Restrictions for Expats
Typically, foreigners are usually restricted to buying one of the following:
- A new build property
- An existing property that will be redeveloped to create more homes
- An off-plan property
These rules are put in place to allow local buyers access to the property market without having to compete against expats too.
Buying a Home on a Temporary Visa
Expats who are planning on living in Australia for a certain amount of time but know they will definitely leave the country are allowed to buy a home as long as it is not an investment opportunity. The only stipulation is that the property is sold when they leave the country. No properties purchased on a temporary visa can be kept.
The Costs of Buying a Home in Australia
It is generally accepted that your expenses will total around 5% of the purchase price of your property:
- Legal fees (usually between AUS$800 to AUS$2,000)
- Loan fees
- Stamp duty
- Foreign citizen stamp duty
- FIRB approval fees
- Property inspection
- Buyer’s agents fees
- Miscellaneous smaller costs
Who Can Help You Buy a Property in Australia
There are a number of professionals, some compulsory and some supplementary that you can employ when buying a home down under.
Conveyancer or Solicitor
Either professional body is qualified to take care of all of the legal work that is associated with purchasing a home. They ensure that comprehensive searches are carried on the property and ensure everything is taken care of in legal terms. They are there to protect you and your money.
There are a number of mortgage brokers in Australia dedicated to helping non-residents secure a mortgage. Their services are usually free for residential loans and they will make sure everything in is place in regard to the financial aspect of buying a home.
Some people utilise the skills of an accountant to help arrange their finances and help them with taxes.
Buyer’s Agent (Supplementary)
Buyer’s agents are helpful for non-residents who cannot fly to Australia to inspect the property they are buying. Their purpose is to find a perfect property for you and get you the best deal on it.
Some buyer’s agents charged a fixed fee, whereas others will ask for an amount up front and then will take a percentage of the purchase price of the property.
The Buying Process
Although the process can vary somewhat from state to state, as long as you have pre-approved mortgage, you are ready to go ahead and start the property search process.
Once you have found a property you are interested in, you can start the negotiation process. As a rule of thumb, Australian homes usually sell for 10% less than the listed price, so this gives you some room to play with.
Once you have negotiated a price with the seller via the buyer’s agent you can forward the contract of sale to your mortgage provider. They will then give you written confirmation of a formal mortgage approval and this takes around a week.
Once your loan has been approved and your solicitor gives you the green light, you ca exchange contracts and pay your deposit.
At this point you must seek FIRB approval. This decision usually takes around 30 days and clause must be present in your contract. Your legal representative will ensure this process is seamless and, in the scenario that you are rejected, that you do not lose your deposit.
Once final arrangements have been completed, your real estate agent will let you know when you can collect the keys to your home and move in!