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International investors, newly arrived & temporary residents
There is a suite of flexible finance & property opportunities available to overseas purchasers. You are deemed to be a foreign investor if you
- reside permanently outside of Australia and are not an Australian citizen (For further details in relation to foreign investment see Foreign Invest Review Board guidelines).
- are a temporary resident in Australia and not an Australian citizen. If you would like assistance with finance please click here.
Foreign Investment Policy
The Foreign Investment Review Board (FIRB) administers the Federal Government's foreign investment policy. In relation to property, the policy is designed to encourage the development of new housing stock.
- All acquisitions of residential real estate in Australia by foreign interests require prior foreign investment approval.
- Foreign nationals with permanent residency status or special category visas such as New Zealanders are exempt from this requirement. Australian citizens who have foreign spouses and are purchasing as 'joint tenants' (both names appear on the contract as purchasers) are not required to seek approval for purchases of residential property in Australia.
- Acquisitions of developed residential real estate by foreign interests are not normally approved except for:
Foreign nationals who will be resident in Australia for 12 months or more (temporary residents such as overseas students, long-term retirees, company employees) and purchasing a property to live in (ie. not for rental purposes).
- The policy covers existing residential real estate, residential development and off-the-plan purchases.
- All contracts of sale must be conditional on FIRB approval and require at least 30 days for a decision to be granted.
Further details
Foreign Investment Policy - Summary for residential real estate. Ph: 02-6263 3795 or visit www.firb.gov.au
What types of real estate are considered?
- Vacant land
- Development must commence within 12 months and a minimum of 50% of the acquisition cost or current market value (whichever is higher) be spent on development. Foreign entities are required to provide the completion date and actual development expenditure.
- House and land
- Units/townhouses
- Hotels
- Farms
- Existing property that is suitable for redevelopment
Redevelopment proposals must provide substantial improvement in the quantity of housing stock and corresponding development expenditure. Prior to redevelopment the existing property must remain vacant.
For both vacant land and redevelopment, once the special conditions have been satisfied, there is no restriction on the subsequent use of the property by the foreign investor. (ie. it can be rented out, sold or retained for personal use).
- New property (off the plan purchases, completed property either not previously sold or occupied). Foreign investors can purchase new property provided that:
(a) the development has FIRB approval to sell up to 50% of the project to non-Australian interests.
(b) an application is made for approval and granted.
- Non-residential commercial properties not included
Developed commercial properties less than $50 million are exempt of FIRB approval. Acquisitions of developed commercial properties, valued between $50 million and $100 million, will no longer be subject to detailed examination, unless the facts of the proposal raise issues pertaining to the national interest.
- Strata titled hotel accommodation
Sales will be permitted to foreign interests of strata-titled hotel rooms in designated hotels where each room is subject to a long-term (10 years or more) hotel management agreement. The hotel management agreement must limit the owners' rights to an income stream, not occupancy. The management must retain ownership of the common property. In addition, owners will not have the right to opt out of the management agreement. The hotel must provide a full range of facilities consistent with industry accepted hotel features.
Foreign Landowners
Stable government, a strong legal system and robust economy make Australia an attractive destination for foreign investor
Tax implications - Federal (Income tax)
If you are living and working overseas you declare your income for tax purposes in the country of earning that income.
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Income Tax Rates *
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$0 - $6,000
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$6,001 - $25,000
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$25,001 - $75,000
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$75,001 - $150,000
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$150,001 +
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Australian resident
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0.00%
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15.00%
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30.00%
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40.00%
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45.00%
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Non-resdient
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17.00%
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17.00%
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30.00%
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40.00%
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45.00%
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- If you have geared investment properties in Australia you do have to declare any income or losses for income tax purposes. Losses are quarantined and offset against any future income.
- It is recommended that a quantity surveyors report is done for all properties. This is done to establish depreciation write-offs which affect current tax benefits and capital gains tax.
- Captial Gains Tax (CGT) is applied at the time of disposal or sale of property.
- GST is not payable on Government taxes or charges, rent from residential property, sale of previously owned residential property.
Tax implications - State (Stamp duty & Land tax)
All State Governments charge hefty stamp duty on both the purchase price and the loan amount (if financed). Some State Governments offer concessions and rebates for First Home Buyers. If you would like a copy of State and Federal Government charges on property transactions then CLICK HERE.
First home buyers grant
If you are planning to take up permanent residency in Australia you may be entitled to the First Home Owners Grant. For details contact Finance Cafe or visit the OSR website in your state or the Federal Government’s FHOG website.
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