Buying property in Australia as an immigrant with a visa has its complexity.
Whether you are a permanent resident or a temporary resident, there are many visa requirements, as well as Foreign Investment Review Board (FIRB) requirements that an immigrant must be aware of. By investing in Australian properties, temporary residents, foreign investors, and even visa holders can be approved to buy with home loans. Contact us to know your options.
What residential properties can an Australian temporary resident buy? What differences are there for permanent residents?
Australian permanent residents share the same treatment as Australian citizens regarding the purchase of residential property. There are no FIRB restrictions for permanent residents.
On the other hand, temporary residents and foreign non-residents are subject to various rules when purchasing residential properties.
According to the FIRB, a temporary resident is an individual who:
You have a temporary visa that allows you to stay in Australia for a continuous period of more than 12 months (regardless of how long you stay on the visa); or
Reside in Australia, have submitted a permanent visa application and have a bridge visa that allows them to stay in Australia until the application has been finalized.
Temporary residents would include holders of the following Australian visas:
All temporary visas.
Temporary Qualified Shortage Visa (subclass 482)
Business Innovation and Investment Visa (Provisional) (subclass 188/888)
Student visas of 12 months or more, such as:
Independent Visa of the ELICOS Sector (subclass 570)
School sector visa (subclass 571)
Education and Vocational Training Sector Visa (subclass 572)
Higher Education Sector Visa (subclass 573)
Temporary postgraduate research sector visa (subclass 574)
Sector visa without adjudication (subclass 575)
Temporary graduate visa (subclass 485)
Specialized regional (provisional) visa (subclass 489)
Previously, the 457 temporary work visa would also be included until it was replaced by the TSS 482 visa.
If your temporary visa is less than 12 months, you are considered a non-resident alien.
What are the rules for buying residential property as a temporary resident?
Residential properties are classified as "new homes" or "established homes."
New homes
New homes are homes built on residential land that has not previously been sold as a home and that:
Has not been previously occupied; or
If the home is part of a development and is sold by the developer, it has not been previously occupied for more than 12 months in total.
A restored or renovated residence that was previously occupied is not considered a new home. Vacant land purchased for residential construction is considered a new home. As such, "Home and Land" packages are also considered new homes, provided that:
Development is completed within four years from the approval date
Evidence of completion is submitted to the FIRB within 30 days of receipt.
There are no conditions or limitations on the number of new homes that a temporary resident can purchase. Approval is generally required prior to purchase.
Established dwellings
Established housing generally refers to residential properties that are on the secondary market. If a residential property is built and occupied, it is generally considered an established home.
Temporary residents can purchase ONE established home to live as their primary residence in Australia. The property should not be used for leasing. The property must also be sold within 3 months if the temporary resident moves out of the established dwelling. In other words, a temporary resident cannot purchase an established home as investment property. Additionally, temporary residents who wish to purchase an established home for redevelopment must seek prior approval from the FIRB before purchasing the property.
FIRB acquisition fee
When you apply with the FIRB, you will be asked to pay an acquisition fee.
Acquire a stake in residential land where the acquisition price is:
$ 1 million or less: $ 14,100
$ 1 million to $ 1,999,999: $ 28,200
$ 2 million to $ 2,999,999: $ 56,400
$ 3 million to $ 3,999,999: $ 84,600
Although we try to keep this post updated, Australian Government changes periodically rates, fees and specifications. Check Here to find any updates after our publication: https://firb.gov.au/guidance-resources/guidance-notes/gn10
Stamp duty
Foreign nationals 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 be required to pay stamp duty and, in some states, a land tax surcharge.
Foreign Citizen Stamp Tax by State:
Victoria: 8%
New South Wales: 8% + 2% land tax
Queensland: 7%
South Australia: 7%
Western Australia: 7%
Tasmania: 1.5% + 0.5% surcharge
Northern Territory: 8%
ACT: 7%
* Note: Please confirm the curren stamp duty with your state government as government agencies and tax rates change.
There is also the possibility that you will be charged an annual vacancy fee. Beginning May 9, 2017, foreign individuals purchasing residential real estate will be subject to an annual vacancy fee when the property is not rented or occupied for more than six months out of the year.
There are various fees, taxes, and fees that differ between states and the specific visa you have. When buying property in Australia, it is highly recommended that you speak with a professional tax agent / Australian Tax Office, and an accountant to make sure you know all the fees.
At what stage do I need FIRB approval and will I be at a disadvantage?
The FIRB guidelines state that you must have approval before a property can be purchased in Australia.
An offer to buy a property may be conditional on FIRB approval, which may cause delays and the offer may not be accepted or as attractive as others without such conditions. The regulations state that you must complete a separate application for each property you intend to purchase. This problem can be mitigated by requesting what is called an "Exemption Certificate."
A Certificate of Exemption allows a foreign person to purchase unspecified property within a six-month period. The exemption certificate means that you don't have to seek individual approval for each property that interests you. More information is available from the Australian Tax Office.
Are there obstacles to funding being approved?
Your temporary resident status may affect your ability to obtain financing to purchase property in Australia. Financial institutions have different restrictions on the amount you can borrow depending on the type and status of your visa.
Being a freelancer or business owner can also have an impact on how much you can borrow. Contact us for more information.
What happens if I don't comply with FIRB policies?
Violations or "Non-compliance" of FIRB policies will incur a criminal and civil penalty. Furthermore, the property in question will be forced to be sold as the property is considered illegal. As such, it is best to comply with FIRB policies and always contact If you have any questions about the FIRB procedures and requirements, you can find the FIRB contact information on the website listed below.
How does buying a property help a 188A Business Innovation visa holder apply for PR?
One criteria for the 888 Business Investment Stream subclass permanent business visa is that you must meet two of the following three requirements:
AUD200,000 net worth assets in your core business (or 2 core businesses) in Australia
Personal and business assets in Australia worth AUD600,000 net
Equivalent of at least 2 eligible full-time employees at your primary business
When meeting the first requirement for business assets and also to purchase a property, meeting the second requirement should be straightforward, considering that the average home price in Australia exceeds AUD 500,000. This would achieve all two of three criteria, meaning that the company would not need to employ two eligible full-time employees.
An immigration agent can help you find the correct Australian business visa
Does the property have a permanent residence or citizenship application?
Owning property is not an essential criteria that must be met when applying for permanent residence or citizenship.
In the case of citizenship, the ownership of a property is considered by the Department of Home Affairs when evaluating the criterion of "close and continuous link with Australia". However, it is not a mandatory requirement, and other factors such as family connections, work history and time in Australia are also considered.
As a temporary resident, can I rent the properties I have purchased?
Temporary residents may intend to build a portfolio of residential properties as a form of investment. Upon purchase, many of these properties are rented to generate passive rental income. As a temporary resident, you can as long as the properties being rented are all new homes. By regulation, you can only buy a home established for your own residence, and not rent it out.
Contact us to know your financing options. We work with a panel of more than 35 banks to find you the most appropriate solution.
