Can New Zealand Citizens Buy Property in Australia?

DIFFICULTY LEVEL: EASY

The simple answer is YES. It is super straightforward to buy property as a New Zealand citizen given almost all Australian qualifications translate to Kiwis. All you need to do is some thorough research. 

Why are Kiwi’s interested in buying property in Australia?

The New Zealand lifestyle has a lot in common with the Australian way of life, making the move ‘across the ditch’ more realistic and appealing for Kiwis. New Zealand citizens living in Australia are considered permanent residents and are therefore offered all the same benefits and liberties as any other Australian; this includes acquiring a mortgage at the same rate and even being eligible for the First Home Owners Grant.

Dissimilar to other foreign property buyers, New Zealand citizens are able to purchase new properties as well as existing, established, vacant land and previously owned properties, just like any Australian can. Further to this, Kiwi’s looking at buying a standard residential property do not need Foreign Investment Review Board (FIRB) approval.

green trees near body of water
Iconic view from the Sydney suburb of Kirribilli

If you are looking to purchase a property as a New Zealand citizen, we recommend considering the following points:

For Kiwi’s currently living in Australia…

As a New Zealand citizen you are allowed to live and work in Australia permanently, and the same goes for buying a house in Australia. Your loan can be used for any kind of residential housing – this includes both a home to live in and an investment property in Australia. 

If you’re not currently living in Australia…

The same rules apply to Kiwi’s looking to buy in Australia that are still living in New Zealand, however, mortgage terms might be slightly different based on your lender and you will need to review your Stamp Duty costs based on which state or territory you are looking purchase in – see ‘Stamp Duty considerations’ for more information below.

Stamp Duty considerations for Kiwi’s

Stamp duty is a tax on a property transaction that is charged by each state and territory and goes straight to the state government – each state in Australia imposes a different stamp duty regime (except the Northern Territory) so these costs can vary state to state. The stamp duty rate will depend on factors such as the value of the property, if it is your primary residence and your residency status.

When citizens from New Zealand arrive in Australia they are allowed a Special Category Visa which means you will be exempt from having to pay stamp duty surcharge which is normally required for NSW, VIC, QLD, WA, SA, the ACT and TAS.

However, it’s important to note that in New South Wales you’ll need to be in the country for at least 200 days to avoid this fee. You’re also required to be in the country at the time of settlement and contract signing in order to be eligible to avoid the stamp duty charge. The only state that you can remain outside of Australia at the time of settlement is in the Northern Territory.

Welcome to the wild Australian property market!

Team Home

Have any questions, ideas or feedback? Let us know at support@home.com.au

Can Singapore Citizens Buy Property in Australia?

DIFFICULTY LEVEL: MEDIUM

The simple answer is YES. Singaporean citizens can buy property in Australia however the following points must be considered before you are ready to enter the Australian property market.

Why should you buy in Australia as a Singaporean?

The Australian property market has a lot to offer Singaporean investors. As an english-speaking city close to home, many Singaporeans have an affinity with the Australian lifestyle, having either studied, worked or visited the country. A Singaporean citizen may consider investing in Australian property for several reasons, such as:

  • Lifestyle considerations
  • Steady growth & rental yield
  • Availability of Insurance
  • Via the Australian Prudential Regulation Authority (APRA), Australia has responsible lending legislation and prudent economic management, this reduces the risk of asset price bubbles
  • Australia has never had prices fall more than 20% in one year

Be prepared to front the cash on Newly Built Properties when buying in Australia

The Australian foreign investment laws dictate that non-residents can only buy newly built properties, with approval from the Foreign Investment Review Board. Many Australians, especially first-home buyers, buy established homes rather than new properties, making their average purchase price between A$500-$600K (2020) which is far below the prices of properties marketed to Singaporeans.

Foreign investors snapping up new developments benefits the Australian construction sector and as there is limited competition for those high-end properties, local buyers aren’t overly fussed with international buyer interest.

Here is our Step by Step Guide to Buying Property in Australia as a Citizen of Singapore

Step 1. Organize or hire your team of professionals that includes
  • Conveyancer/Solicitor → to take care of all the legal work for you
  • Mortgage broker → ideally with experience working with non-resident buyers. We recommend BC Invest.
  • Accountant (if required) → to assist you with structuring your financials and saving on tax as they are the experts
  • Buyers agent (if required) → to source the listings and negotiate the price on your behalf, this is also where Home Live comes in!
Step 2. Get your loan pre-approved

With great properties on the Australian market being snapped up so quickly, having a loan pre-approved will ensure you’re in with the best chance. Loan pre-approval will also determine that you are eligible for a loan and how much you can borrow.

Step 3. Applying for a mortgage

Many banks in Australia have begun tightening their lending criteria for all home loans, specifying ‘Interest only’ loans for ‘Owner-occupied’ units in order to decrease the risk of default as there is genuine demand for the houses being occupied. However, Australian banks and lenders tend to favour Singaporean investors due to the strength of the Singaporean Dollar (SDG) and the stability of the SNG economy.

While Australia has started to tighten its lending, Singapore banks are still selectively lending to Australian property purchases for Singaporeans or permanent residents who are tax residents in Singapore.

Step 4. Confirm you qualify with the Foreign Investment Review Board (FIRB)

Prior to the purchase, you must be able to secure approval from the Foreign Investment Review Board (FIRB), which is responsible for ensuring that foreign investments are beneficial to Australia’s economy. This explains the logic behind forcing foreigners to purchase new dwellings, as this adds to the current housing stock.

Step 5. Find a suitable property you wish to buy (Home.com.au)

Non-residents or foreigners including Singaporeans – cannot buy established dwellings in Australia. There are strict rules about what types of residential investment property foreigners can purchase in Australia, which is limited to:

  1. Under-construction or new buildings;
  2. Vacant land for construction, if construction begins within 24 months; and
  3. Established dwellings to be demolished and replaced with a greater number of dwellings
Step 6. Negotiate the purchase price

Many buyers prefer to make use of a professional for this, for example a good buyer’s agent.

Step 7. Obtain formal mortgage approval

You cannot commit yourself to buying a property until your mortgage has been formally approved. Send your mortgage broker your contract of sale when you’ve found a property to buy to start the formal approval process.

Step 8. Exchange contracts and pay your deposit

Once your mortgage is approved and your solicitor/conveyancer has given you the go-ahead you can sign your contract. Normally, Australian property purchases require a 10% deposit to be paid upfront however this amount varies depending on states and can also be negotiated.

Step 9. Seek FIRB approval

So, if you find any property you wish to purchase:

(1) You have to apply to FIRB

(2) You will need to fill in a foreign investment application form from the Australian Tax Office (ATO) website.

Application fees start from $5,800 for properties worth $1 million or less, and the fees increase as the property price bracket increases. The approval process from FIRB may take a minimum of 30 days.

Foreigners who reside in Australia (such as international students or those working in Australia) are considered resident buyers and allowed to purchase existing properties on the market. They need not seek FIRB’s approval. However, they are subject to other restrictions when selling the property when they leave Australia. 

Ensure you check the various state requirements if you belong to this category of foreign buyers, and ensure you can get the following documents:

  • IDs (Passport and an additional ID required by the bank)
  • Payslips
  • Notice of Assessment
  • Between 3 to 6 months worth of bank statements
  • Employment letter or contract
  • 3 to 6 months statement of debt and liabilities
  • Singapore credit file

For Self-employed Singaporean citizens below mentioned documents will be required-

  • A minimum of 2 to 3 years of trading history.
  • A minimum of 2 years of income tax and company financials.
  • At least 6 to 12 months of bank statements for the company and the individual.
  • If you have a stable employment history and income, a strong asset position and have saved up a large deposit, then it increases your chances of loan approval.
Step 10. Final arrangements

If you are living overseas you may need to visit the Australian embassy or consulate to get identified or to have your loan contract witnessed. If you have a trusted friend or relative living in Australia then you can appoint them as a Power of Attorney (POA) and they can sign the loan contract for you.

Settlement (when the property actually changes hands and your loan is advanced – this will be handled by your Conveyancer/Solicitor in conjunction with your bank and mortgage broker so you don’t need to be there for this to happen. And you are good to go!

Welcome to the wild Australian property market!

Team Home

Have any questions, ideas or feedback? Let us know at support@home.com.au

Helpful Links

© 2020 Honed Real Estate Pty Ltd. All Rights Reserved.
Built by Honed Digital.