The detailed guidelines for temporary visa holders or foreigners to buy residential properties in Australia

1. Applying for FIRB Approval

Temporary visa holders and foreigners are required to be approved by the Foreign Investment Review Board (FIRB) before they can purchase a residential property in Australia. Noting that, the rules applied for commercial properties are different and not mentioned in this article. In general, The FIRB will include:

You need to obtain an approval for every specific property that you intend to buy
You can ask your lawyer or real estate agency to do this for you or you can apply by yourself for online via https://firb.gov.au/
The answer from FIRB may take from 7 to 30 days depending on different states or specific cases
You should include a FIRB condition to the vendor that the transaction should be only performed when approved by the FIRB
You will need to pay the application fees for every time you apply for FIRB approval

For temporary visa holders

At least more than 12 months remained in your visa at the time you purchase residential properties
You can only buy one established house to live in
You have to sell it once you do not live there anymore
You can buy an investment property and it must be a new property, or a land to build a new property
You don’t need FIRB approval if you’re buying the property with an Australian citizen as joint tenants and must be in a spousal relationship. This doesn’t include the relationships such as business partners, parents, siblings…

For foreign investors

The foreigners investors can’t buy an established house
They can buy the investment property and it must be a new property or the land to build a new property
Foreigners investors are approved to buy established houses or properties if they want to demolish it and carry out redevelopment works. This mean you can be a property developer

2. Stamp duty

In Australia, stamp duty is always required whenever someone purchase a property. The stamp duty may vary depending on the price of the property and different states or territories

On the other hand, the temporary visa holders and foreigners must pay an additional amount for stamp duty, this is called Foreign Owner Surcharge. The Foreign Owner Surcharge for each State and territories as follows:

7% in South Australia
8% in New South Wales
7% in Victoria
3% in Queensland
4% in Western Australia

3. Other costs may involve

Legal fees if applicable
Insurance
Council fees or water rates
Inspection fees.

4. About mortgage or money lending

Some of Australian banks or financial companies will lend to temporary visa holders or foreign investors but with a very higher interest rates and setup fees. However the advantage of these loan are that they may be up to 70% of the valuation of the property

5. Choosing property

There are many aspects you should consider before buying a property. Some are easy to value but most of them are complicated and you may not familiar with. The follows are the most important aspects that you should focus on:

The market price of the property. You should be careful, there’re many foreign buyers pay far more than the fair market value for properties because they don’t know how to deal with the vendors.
Inspection process. It’s highly recommended that you use a professional agent to make the detail inspection and investigation about the property that you intend to buy. The investigation should include electricity, plumping, building, around properties, and much more
Renting possible and Return on Investment (ROI). It is important to buy a property that will be easy for renting or in demand by the market

Conclusion

Buying a house is always a complex process, specially if you are a foreigner or a temporary visa holder, it involves many risks and legal conditions required. We strongly recommend you work with a professional agent or your lawyer to understand clearly about what is your interests and risks. At a professional Australian law firm and migration agent, we’re here to offer the legal service that may help you in protecting and purchasing your property in Australia.

Should you have need further information, do not hesitate to contact Doconade Lawyers, our experts will be very happy to help you.