Have you ever thought to invest in property as a non-resident? In recent years, the Australian residential property market has been a very popular destination for foreign investors, particularly American buyers. This hardly a surprise if you consider the economy. Australia’s economic stability in combination with a good property market free of speculation has made the land down under a safe choice for investors.
Interestingly, many Australian residents who hold temporary or permanent visas don’t even realize they can qualify for a home loan. Hence, they are missing out on the benefits of the Australian real estate market.
Moving long distance is always a big challenge, and moving to another country is a whole new level of different. It’s scary because it is out of our comfort zone, but that is where magic happens. Furthermore, many US residents are planning to relocate to Australia and to invest in property as non-residents. They are attracted by its amazing economy, great job opportunities and nice weather. And all of that comes without a language barrier, which is a win-win situation. If you are having these thoughts, you first need to find international moving experts in your area in order to have a stress-free moving experience.
Before you hit the road, make sure to do a big research on the local real estate market and find temporary accommodation in order to stay there before you buy your own property. There are plenty of regulations when you are moving to another country, so better hire high-quality moving experts and leave the bureaucracy to them.
Stability is key
There are many reasons why more and more people invest in property as non-residents. The main reason is the stability of the market, which Australia has, among other factors.
- Amazingly, around 70% of Australian households are homeowners, so there is not much space for speculation.
- There has been a consistent undersupply of housing in all larger cities.
- This country has responsible lending legislation and prudent economic management via the Australian Prudential Regulation Authority (APRA), reducing the risk of asset price bubbles.
- Most importantly, Australia has never seen prices fall more than 20% in one year.
- Overseas property markets such as Hong Kong or the United States have suffered significant crashes, but Australia has never experienced one.
How can I invest in property as a non-resident?
Most noteworthy, foreign investors are not allowed to buy existing homes, but they can buy new properties without a problem. This includes both off-the-plan apartments and vacant land. For example, if you’re a non-resident foreigner and you want to buy residential property in Australia, you will first need to obtain approval from FIRB. You can easily apply for that approval online. Although there is no limit to the number of new properties you can purchase, you will probably need to apply for approval before each purchase.
According to FIRB, a new property must be built on residential land. Additionally, it must not have been previously sold as a residence and must meet some other requirements.
- It must not have been previously occupied.
- If the property was part of a development and sold by the developer, it should not have been previously occupied for more than 12 months.
- In case you want to buy vacant land for development, the development must be completed within four years of approval.
The FIRB application
Before you apply for approval, it’s always a great idea to get some legal advice to make sure you understand and agree with all the necessary legal requirements. Then, you just follow the steps to apply for foreign investment approval.
- Visit the FIRB website and apply.
- Then, follow the link to the Australian Taxation Office’s foreign investment application form.
- The third step is to fill out the application form with your personal details and any previous FIRB application reference numbers.
- Provide the exact address and details of the property you wish to buy.
- Carefully read and sign the declaration.
- Then, submit the application and pay the required fees.
- You will get an answer probably within 40 days.
- Before applying for a home loan, you should obtain this approval from the FIRB.
Determine your budget
Before even thinking of buying a property abroad and moving, you need to know your budget. Hence, work out how much you can afford and stick to your financial plan. And remember, when you require a mortgage, you will generally need a deposit of at least 10% of the property’s value. Check your credit score and make sure you are prepared for that.
Research the area
Before you pack your things, make sure to research the areas you are interested in. Check properties and their prices in order to ensure that they are affordable. You will also need to inform yourself properly about the fees and other repayments to invest in property as a non-resident.
Choose the property that best suits your needs
This is especially important if you are going to live there yourself, but in any case, you want to know what you are investing in. Saying goodbye to Brooklyn and hello to some foreign country is a bold move and a whole new chapter of your life. But change is usually a good thing, because it makes you see the things from another perspective. And fresh perspective is sometimes exactly what you need.
For overseas buyers who are not planning to live on the property in question, it is more important to focus on the value and possible return profit.
Let the conveyancing process begin!
Engage a local real estate agent and make an offer. Once it has been accepted, you will need to consult an attorney who will begin the process of transferring the property into your name. And that is about it – you can pick up the keys and enjoy. To invest in property as a non-resident is never and easy job but, at the end of the day, it’s worth it!