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2020 Foreigners Guide to Property Investing in Australia

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    The 2019 Complete Foreigner's Investment Guide to Australia

    This article is meant to serve as an introduction to property investing in Australia from the perspective of a foreign investor. It also covers the legislation and processes that are involved in the event that a foreign investor decides to purchase a property in Australia.

    If you're an investor looking to speak to an Australian specialist and build a relationship, reach out to us via info@klearpicture.com.au or via our contact form. We're located in Melbourne CBD and have spent the last 30 years assisting local and foreign investors on picking the right property and how to get the most of it.

    Travelers have been charmed by every facet of Australia's culture for decades, from the country's rich indigenous history to its youthful and thriving cafe scene. Australia is famous for its breathtaking beaches, searing red deserts, and bustling cities in addition to its multi-cultural population.

    There is a wide variety of intriguing things to discover in Australia, from the country's rich cultural heritage to its booming economy and highly skilled labour force. According to the World Competitive Workbook, Australia's economy is one of the most resilient in the world. Furthermore, Australia has had stable growth for the past 22 years and this trend is expected to continue. In addition to this, it has a strategic location in Asia and the Pacific, which is the region with the highest rate of economic expansion worldwide.

    Would you like to speak to a specialist? Book a complimentary discovery session by calling: (03)999 81940 or emailing team@klearpicture.com.au.

    The population of Australia is estimated to be close to 253 million people (Melbourne, over 5 million and Sydney, over 6 million).

    Its popularity has also resulted in high continuous international migration over the years, which, combined with recent immigration policies, has resulted in an increase in population of 2.01.6 percent per annum from 2011 to 20142; this is higher than the average annual population growth rate for the world, which is 1.2 percent.

    It is not anticipated that this pattern will change in the years to come, which will lead to a substantial chronic demand scarcity of residential properties across the country. This will, in turn, result in higher rental yields and accelerating capital growth. Property investors looking for investments with great growth potential and high return on investment will find this to be the ideal prospect.

    The Australian economy has continued to show robust growth, and the country's unemployment rate has remained relatively low.

    Why should I consider investing in real estate in Australia?

    • One of the most essential considerations in real estate investment is the rate of population increase in the area. Because it is highly unlikely that the rate of population expansion in Australia, particularly in major cities like Melbourne and Sydney, would ever slow down, investing in real estate in these areas is a good idea if one wants to guarantee that their capital and rental income will continue to rise.
    • The potential of Australian real estate to achieve significant capital growth while also maintaining a stable rental return is a quality that is frequently praised by investors.
    • For the past three decades, the Australian real estate market has been one of the most stable and consistent in the world. As a result, Australian properties have generated an average return on investment of 7% per year, with fewer years of decline when compared to almost every other property market in the world.
    • It is unheard of for major real estate market corrections to occur in Australia, in contrast to those that have taken place in other countries' markets such as Hong Kong or the United States. The prices of homes in economies that are prone to volatility have fallen by as much as 70 percent, leaving investors with enormous losses. This is frequently the result of extensive speculative activity on the part of investors from other countries or asset price bubbles that are fueled by debt. Due to the fact that the majority of homes in Australia are occupied by their owners, the influence of investors is significantly reduced. In spite of the fact that property values in the United Kingdom and the United States dropped dramatically as a result of the Global Financial Crisis of 2007–2009, the value of real estate in Australia actually grew during this time.
    • The price of real estate in Australia has almost doubled every seven to ten years on average over the past century, making it one of the best performing property markets in the world.
    • Investing is made simple in Australia, in contrast to the majority of other nations, which either have laws on foreign investments that are overly restrictive or banking regulations that make it difficult to invest. In contrast, this is not the situation in Australia:
      • You are not required to establish a business or make a purchase with an Australian citizen.
      • The approval process for foreign citizens by the government is straightforward, albeit they are subject to additional taxes. Please read the rules that are listed below.
      • Mortgage brokers who specialise in working with foreign borrowers might help you improve your chances of getting approved for a loan.
      • In Australia, the National Consumer Credit Protection Act 2009 is the piece of legislation responsible for the country's robust and efficient consumer protection laws (NCCP Act).
      • As in Hong Kong and Singapore, the legal system in Australia is modelled after that of the United Kingdom (UK), making it easy for many foreign investors to navigate.
      • Instability on the political, social, and economic fronts is to a low degree in Australia.
    • Living in Australia is a really desirable experience. Cities with a diverse multinational population and spectacular natural beauty are two of Australia's most famous attributes. It is anticipated that the current pattern of migration to Australia will continue over the next 50 years, which will likely result in an increase in the cost of real estate.
    • The Australian real estate market has shown resiliency by rejecting downturn trends, providing investors with the confidence they need to keep their assets for extended periods of time. Because of its low level of volatility, the Australian real estate market has become the go-to option when compared to stock markets and other real estate markets throughout the world.
    • It is acceptable for non-locals to possess freehold properties and to enjoy the benefits of ownership in the same manner as locals would.

    Would you like to speak to a specialist? Book a complimentary discovery session by calling: (03)999 81940 or emailing team@klearpicture.com.au.

    Property is seen as a tangible investment by investors since it is under their control and has the potential for capital appreciation

    Property has been favoured over other types of investments for a long time by astute investors because of its consistent returns, the ease with which financing can be obtained in comparison to stocks, and its appreciating value, which can be increased through renovation or restoration.

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      What specific things should a foreign investor be aware of? How do I invest if I'm not an Australian citizen?

      The Australian government stands to benefit significantly from investment from overseas. There are laws and restrictions in place regarding foreign investment in order to maintain order in the Australian real estate market. This is done in order to control the market's stability. Although investments in foreign countries are welcomed and even encouraged, they must adhere to a variety of rules and regulations that are enforced by the Foreign Investment Review Board (F.I.R.B). Non-residents are permitted, in most cases, to make investments in residential developments that are both newly built and currently under construction. According to Australia's policy regarding foreign investment, the housing sector should be eligible to attract investments from overseas in order to increase the supply of new residential homes.

      As a consequence of this, the vast majority of purchases made by international buyers are for brand-new residential homes; in fact, many of these buyers make their purchases even before the building is completely constructed.

      • Foreign investors are eligible to engage in residential properties that are now under construction or that have just been developed as long as the property has never changed hands and has been vacant for more than a year (including apartments and townhomes). Any transaction involving the purchase of residential property by a non-citizen requires prior approval from the Foreign Investment Review Board (FIRB). The application process is often very straightforward, and permission is typically granted within a month of submitting it. The F.I.R.B. requires buyers to first submit their applications before they can purchase a property. It is possible to prepare a contract without first seeking approval from the F.I.R.B. if the contract clearly says that the sale is "subject to approval by the F.I.R.B." within a defined time limit.
      • The processing of an application typically takes thirty days after it has been submitted, is completely free, and is very straightforward. We are also here to assist you in making the process of purchasing a property straightforward and uncomplicated.
      • Many banks in Australia, similar to banks in other countries throughout the world, are willing to lend up to 80 percent of the value of a property to foreign investors. Legal Methods: You are required to have legal representation if you decide to acquire a property in Australia if you want to do so. Your Australian lawyer will provide you with assistance in analysing the Contract of Sale, will send you the necessary documents, and will represent you in any legal challenges that involve your Australian property.

      An illustration of a typical real estate purchase procedure

      Please take into consideration that the preceding description of the sale process is only a generalisation and that the specifics of any individual transaction may differ greatly.

      • Property Management - Employing a property manager to oversee the normal maintenance of an investor's real estate holdings is the most straightforward and convenient option available to non-domestic investors. A property manager will publicise your home, locate individuals who are a good fit for renting it, send out rental application forms, and draught up tenancy agreements. Through the handling of any emergent maintenance difficulties and the preparation and regular updating of cashflow reports, they will alleviate the burdensome labour that is associated with property upkeep. There is a wide range of variation in the proportion of gross rent that is allocated to cover the expenses of property management, from 5.5% to 7.7%.
      • Stamp Duty - When purchasing pre-construction homes, numerous states and territories offer rebates on stamp duty based on the amount of construction that has been finished at the time the contract is signed. As a direct consequence of this, purchasers are only responsible for contributing a portion of the stamp duty. Because of Australia's low overall depreciation rates, the tax burden on Australian real estate is quite low. Stamp duties can vary significantly from one state to the next. (A stamp duty rate of approximately 5.5% is expected to be applied in both the state of Victoria (Melbourne) and the state of New South Wales (Sydney).)
      • Foreign Investor's Levy - On top of the standard stamp tax that is collected locally on transactions involving real estate, an additional stamp duty equal to 7% of the purchase price is expected to be paid by foreign investors.
      • Taxes - You will be subject to taxes just like people in other countries if the money that you make from investing in real estate brings in. On the other hand, there are a lot of different ways to use tax deductions to cut your taxes or put them off (expenses incurred as a result of generating the income). You can rely on the specialised knowledge and experience that we have to guide you through the claims process so that you may get the most out of your tax deductions. Streamlining your financial flow can also be facilitated by working with an accountant who has prior experience in the field of real estate investing.
      • Mortgages - Although Australian financial institutions do not offer financing to investors from other countries, financial institutions in other countries, such as Malaysia and Singapore, do offer such services in order to assist their nationals in purchasing property in Australia. Private lenders who can be trusted can also provide financial assistance to international borrowers.

      Is investing abroad difficult?

      The steps involved in acquiring a home offline and those involved in doing so online are, for the most part, identical. Although the legal and accounting procedures could be different, we are here to help you settle any administrative difficulties and guide you through the process of buying and keeping the property.

      Where Should I Put My Money?

      In the interest of our customers, we are always on the lookout for high-quality real estate investment goods. Investigate possible real estate investment opportunities across the entirety of Australia. Homes located within a 5–10 kilometre radius of a big central business district (CBD) continue to be in high demand from both potential purchasers and tenants. Location is still the most crucial aspect to consider. We place a significant emphasis on neighbourhoods that have amenities, schools, and easy access to public transit; neighbourhoods that are in high demand; and neighbourhoods that are just getting started.

      When doing research on a given development, ARE gives a lot of consideration to the following factors in particular:

      • Location
      • What is the distance to the CBDKey Commercial Center?
      • Statistics for the region
      • the causes of the population growth
      • Local public transportation
      • Services and leisure options close by
      • Nearby commercial areas
      • Price of nearby properties
      • Growth tendencies in the past
      • Rental-producing data
      • Availability and demand for local real estate

      In addition to this, we take into consideration the anticipated rental returns, demand, and how appealing the property or location will appear to prospective tenants.

      A comprehensive awareness of these interrelated concerns is required in order to make sound decisions regarding one's financial situation. It has come to our attention that this is one of the primary factors contributing to the fact that overseas investors have not moved forwards with their plans to purchase Australian real estate. Because of this, we have every confidence that our years of experience, investigation, and support will make your purchase easy and uncomplicated.

      You won't find viable investment sites until you do a lot of reading and studying, but you will eventually find some. Following that, you will focus the majority of your investigation on the properties that are for sale in that particular location.

      As an additional value-added service, we assist our customers in the process of employing professionals such as attorneys, tax advisers, mortgage brokers, and property managers. Because of our many years of experience, we have been able to establish a list of trustworthy consultants who have made it simpler for overseas investors to purchase real estate in Australia.

      Purchasing construction-in-progress properties

      Properties in Australia that are still in the pre-construction phase, which refers to developments that are in the process of being built, are frequently favoured by overseas investors. Because there are so few new residential developments being built in the majority of Australia's major cities, the bulk of the country's construction projects are selling out far before they are completed.

      Condominiums, townhomes, and sometimes even landed properties can be found among pre-construction housing options. In order to ensure that the house is successfully sold before it is finished being built, developers will commonly try to entice buyers by offering attractive prices that are lower than the estimated value of the home once it is finished being built.

      To secure the reservation of a pre-construction home, the buyer is often required to pay a holding deposit that ranges from one thousand to five thousand Australian dollars. The next thing that will happen is that a contract will be handed out to be signed and mailed back within 21 days along with a ten percent down payment. It is not essential to make any additional payments until the construction of the property is completed, which typically takes between one and two years.

      Because ARE maintains connection with some of the most reputable pre-construction complexes in Australia, our investors have the opportunity to select the best available units in a pre-construction development well in advance of the time when it will be made accessible to the general public. In addition to that, ARE will on occasion get exclusive access to particular pre-construction projects.

      Please understand that the purpose of this document is merely to act as a reference. It is not to be construed as a warranty in any way. It should only be used as a general reference since, despite the fact that every effort has been made to ensure that the information included in this document is accurate as of the time of publication, the document was printed. The relevant authorities have stated that they retain the right to alter the material at any time. The readers are responsible for conducting their own independent research.

      Before you start the purchase process, create a budget and a plan

      Before purchasing a home in Australia, you are required to carry out extensive research, create a detailed budget, and plan everything out in great detail.

      It is always a good idea to talk with a real estate agent who can offer you with some local expertise to assist you in choosing an affordable area with a high rate of return. Even if you may have a specific site in mind, it is always a good idea to check with a real estate agent.

      Confirming that you are in a financial position to purchase the house is another essential step.

      Because Australian banks won't lend to you if you can't show that you can pay off the loan, you need to have a budget in place that is both reasonable and within your financial means.

      Step 1: Bring together your skilled team


      If you want someone else to handle the legal process on your behalf, you will need to hire a conveyancer or a solicitor.

      They are accountable for handling the management of the ownership transfer, conducting searches on the property, and examining the contract prior to your signing it.

      Keep in mind that the conveyancer that you select must either live in the same state as the property that you are acquiring or at the absolute least hold a valid licence to conduct business in that state.

      In Western Australia, legal professionals who handle property transactions are referred to as settlement agents (WA).

      Conveyancers are commonly recommended to the clients of real estate brokers, but we strongly suggest that you choose one who is more likely to be objective than the others.

      Legal procedures

      You are required to have legal representation if you intend to make a purchase of real estate in Australia. If you hire an attorney who is experienced with Australian real estate law, the process of purchasing the property will go much more quickly and easily.

      Because ARE is aware that a large number of overseas investors do not have access to solicitors in Australia, it has created partnerships with some of the best attorneys in the country who are familiar with the requirements and concerns that you have as a foreign investor.

      Your Australian lawyer will provide you with assistance in analysing the Contract of Sale, will send you the necessary documents, and will represent you in any legal challenges that involve your Australian property. In order to make this service more efficient for you and maximise its benefits, you will have direct communication with your Australian lawyer.

      Mortgage expert

      A competent Australian mortgage broker who has prior experience aiding non-residents with their mortgage applications needs to be a part of the team of specialists that you have assembled.

      Brokers may be contacted easily in Australia regardless of where they are employed, and their services are typically provided at no cost for the vast majority of residential mortgages and loans. They are also not required to inspect the property that you are about to buy.

      Accountant (if required)

      Even while it is not obligatory of you to hire an accountant, doing so has several benefits; as a result, we strongly recommend that you do so.

      Your accountant, with their expertise in Australian tax law, will be able to aid you in the organisation of your finances and assist you in lowering the amount of tax that you are responsible for paying.

      If you want to establish up Australian corporations or trusts to hold your investment, you are going to require the assistance of an accountant.

      Your prefered accountant might be located anywhere in Australia, regardless of the city or state in which you now call home.

      You must pay close attention to the taxes that are associated with vacancy, stamp duty, foreign citizen stamp duty, land tax, and capital gains tax.

      There may be problems involved depending on where you live and whether or not your home country has a tax treaty with Australia that combines the two countries' tax systems.


      When purchasing a property that is still in the pre-construction phase, buyers may be eligible for stamp duty refunds in some states and territories. As a consequence of this, buyers are only required to pay a portion of the stamp duty depending on the degree to which the work has been completed at the time the contract is signed. Because of Australia's low overall depreciation rates, the tax burden on Australian real estate is quite low.

      If you need any additional information regarding taxes, you should consult with your accountant or get in touch with ARE.

      If your investment in real estate generates a profit, just like in other countries, you will be required to pay taxes on that income. On the other hand, there are a lot of different ways to use tax deductions to cut your taxes or put them off (expenses incurred as a result of generating the income). You can rely on the specialised knowledge and experience that we have to guide you through the claims process so that you may get the most out of your tax deductions. Streamlining your financial flow can also be facilitated by working with an accountant who has prior experience in the field of real estate investing.

      When it comes time to file your annual tax returns, you may be able to benefit from the connections that ARE has established with a number of highly experienced tax accountants.

      Different Currency Loan

      You also have the option of submitting a loan request to a foreign financial institution in a significant currency such as the Euro, the Pound Sterling, the Singapore Dollar, or one of the many others. You should seriously consider submitting an application for a loan denominated in a different currency for two primary reasons:

      features interest rates that are a considerable amount lower than those that are offered in Australia.

      may possibly minimise your capital debt

      Despite the temptation of lower interest rates, taking out a loan in a currency other than your own will result in currency exchange spreads. This is due to the fact that your income and the loan will be denominated in different currencies.


      When compared to the costs of insurance in other countries, those in Australia are comparatively more affordable. There are three different kinds of insurance that need to be purchased for a property: landlords' insurance, building insurance, and house contents insurance. ARE will walk you through the process of applying for insurance and has done in-depth research to compare all available options from various insurance companies.

      Agent for buyers (if required)

      A buyer's agent is also very beneficial if you live in another country and are unable to visit the property you are purchasing in person.

      The basic responsibilities of a buyer's agent are to identify the property that meets your needs and to negotiate a favourable agreement on your behalf.

      They will negotiate with the real estate agents on your behalf and ensure that the property you are buying is a good investment before they hand over the keys.

      Your buyer's agent needs to be registered in the state where you seek to acquire a house and must also be physically present in that state.

      Keep in mind that a buyers agent shouldn't be selling their own property; rather, they should provide advice that is unbiased and objective.

      If they are marketing their own properties or getting paid by the developer, they are not acting as your buyer's agent and should not be trusted with your transaction.

      They are a real estate broker that are working on the vendor's behalf!

      Some buyer's agents will charge a flat fee for their services, while others will need a down payment in addition to a percentage of the property's final sales price.

      Step 2: Receive a loan preapproval

      It is absolutely necessary for you to get pre-approved for a mortgage before you start looking for a house.

      It doesn't take long for desirable houses to sell once they on the market.

      The buyer who has already been pre-approved for a mortgage has a far better chance of purchasing the best assets while the other buyers are still putting together their mortgage applications.

      More importantly, you are aware of both your eligibility for a loan and your capacity for additional borrowing.

      Why waste time looking for a house or apartment if you find out later that you won't be able to qualify for a mortgage?

      Because of this, we strongly recommend that you do not buy a house that won't close for at least three months after you make your offer.

      Your pre-approval will become invalid and you run the danger of having your down payment taken away if the lender is unable to help you in the future.

      Step 3: Applying for a mortgage

      When applying for a mortgage as a non-resident, it could be difficult to get approved due to the stringent lending rules that are often in place.

      There are not a lot of financial institutions that are willing to lend money in this sector, especially to foreign investors.

      If you are considering applying for a credit facility so that you can finance your Australian property, you should know that you can acquire a loan from an Australian bank. Prudent investors will make sure their loans are pre-approved by the bank so that they may quickly capture a wonderful offer when they find it. This allows them to act more quickly.

      The prevalence of financial institutions in Australia that are willing to extend credit contributes to the country's generally favourable interest rate climate. Many banks in Australia, similar to banks in other countries throughout the world, are willing to lend up to 80 percent of the value of a property to foreign investors.

      The vast majority of trustworthy banks now offer online banking services, which makes it simple to log in from another country in order to monitor transactions, add money to your account, and communicate with the bank via the internet.

      ARE is able to assist you in handling the process of applying for a loan and in identifying the most reasonably priced, flexible, and structured loans that are currently available. Our financial advisors keep flexible hours and are accustomed to liaising with customers based in a variety of locations, both of which should make it easier for you to get in touch with us. Throughout the entirety of the process, you can expect to be contacted via phone, fax, and email with any relevant updates.

      Step 4 – Verify your eligibility with the FIRB

      Non-residents of Australia and holders of temporary visas are required to acquire authorisation from Australia's Foreign Investment Review Board before making any legal purchases of real estate in the country (FIRB).

      Exempt from the requirement to obtain FIRB authorisation are nationals of New Zealand (NZ), permanent residents of Australia, and citizens of Australia.

      The procedure to obtain FIRB permission is speedy and uncomplicated, and the time it takes to hear back from them after an application has been submitted might range from one to two weeks.

      There may be numerous costs involved, depending on the price of the property or land that you wish to acquire, including the following:

      • $1 million or less: $5,600
      • $1 million to $1,999,999: $11,300
      • $2 million to $2,999,999: $22,700
      • $3 million to $3,999,999: $34,000
      • $4 million to $4,999,999: $45,400
      • $5 million to $5,999,999: $56,700
      • $6 million to $6,999,999: $68,100
      • $7 million to $7,999,999: $79,500
      • $8 million to $8,999,999: $90,900
      • $9 million to $9,999,999: $102,300
      • $10 million or higher: Please contact the Australian Taxation Office for a fee estimate (fees are tiered per million).
      • Agricultural land: You must notify FIRB when purchasing farmland worth $15 million or more as the fees can be substantial.

      Even if you won't really need to submit for clearance until you've identified a property, you should start investigating the FIRB standards so that you may avoid acquiring an ineligible home. Doing so will help you avoid purchasing a home that is not eligible for purchase.

      Because some real estate developers have already obtained FIRB permission for their entire development, you do not need to worry about it if you are acquiring a freshly constructed unit. This is because some real estate developers have previously received permission from the FIRB.

      Foreign Currency

      If you plan on purchasing property in Australia at some point in the future, you will sooner or later be required to send money there, either as a down payment or just to add funds to your bank account in Australia. In addition, if you ever decide to rent out your property or sell it, you will eventually have to take money out of the account.

      Foreign investors should always exercise caution and make sure they are up to date on the most recent exchange rates as well as the legislation regarding international money transfers. Obtaining a loan in the country in which you intend to invest is a shrewd strategy for avoiding exposure to high currency rates.

      Finding Australian Real Estate to Invest In

      The steps involved in purchasing a home in Australia are very similar to those involved in purchasing a home in the United States. Nevertheless, there are a number of important differences to consider:

      Getting ready to make a purchase of real estate:

      It is possible for investors to purchase real estate in a hurry without having a complete understanding of the processes that are required. Take note of the following, if you please:

      Inquire with your Australian financial counsellor for guidance in determining a loan amount that is reasonable and the best way to organise the purchase in order to optimise tax deductions.

      Attorney: You are going to require the services of an attorney in order to look over the Contract of Sale and give you the required guidance. They will have your documentation delivered to you through courier so that you can sign it before they can function as your representative. If you would like, we can make a recommendation for a local attorney.

      Deposit: If you decide to purchase a home in Australia, you will be required to put down a deposit of ten percent. You are under no legal obligation to purchase the property until both the money and the contract of sale have been received and signed. Both wire transfers and deposit bonds are acceptable methods of payment for the initial deposit (not all developers accept deposit bonds, therefore seek advice from your Property Consultant).

      Step 5 – Locate a property

      It is time for you to make the journey to Australia and get started looking for real estate there.

      You also have the option of cooperating with a buyer's agent (see above).

      If you have decided against working with a buyer's agent, it is possible that it might be beneficial to base an appraisal of the property on transactions that are comparable to those that have already taken place.

      Make sure you compare the sizes of your properties to other houses that have recently sold outside of the complex and that are comparable in size. This will help you get a more accurate appraisal.

      The value of the property will frequently depend on the bank that your mortgage broker chooses to work with. It is in your best interest to hold off on making a purchasing choice until this has taken place, as doing so could prevent you from overpaying for the item.

      The problem is that banks often neglect to warn you if the valuation is undervalued, and this is the source of the problem.

      They are only required to advise you of this if it will have an effect on the approval of your loan; otherwise, they are not required to do so by law.

      Selecting a home:

      It is possible that a holding deposit of between $2,000 and $5,000 AUD will need to be placed into a trust account, however this will depend on the property that you choose. This will ensure that the property is reserved for the next 21 days, which will prohibit any other party from purchasing it during that time.

      If you decide not to purchase the property, the holding deposit will be refunded to your account once it has been transferred to the new owner, or once the property has been sold. Because the holding deposit is held in a Trust account, it is impossible to withdraw it without first obtaining your authorisation.

      You may expect the legal documents to be delivered to you through courier, and you will have 21 calendar days to study, sign, and deliver the Contract of Sale to your attorney in Australia, along with the required 10% deposit.

      Factors to Consider by Property Type

      Newest homes

      Purchases of brand-new homes in Australia by non-Australian citizens who do not reside in the country will typically not be subject to any restrictions or requirements. There is no cap on the number of newly constructed homes that a non-resident alien from another country is permitted to buy, however authorisation is typically necessary before making any acquisitions.

      A residence is considered to be brand new if it is going to be built, is currently being built, or has been built on residential land, if it has never been sold as a dwelling before, and if has either of the following features:

      • not previously occupied;
      • If the home is a part of a development (50 or more properties) and was sold by the development's developer, it must have been empty for a total of at least 12 months.

      It is not possible to classify as a new dwelling an already-existing residential property that has undergone modernisation or refurbishment.

      For the purposes of the foreign investment system in Australia, a single dwelling that has been built to replace one or more demolished existing dwellings is not typically classified as a new dwelling. This is because the single dwelling has been built to replace one or more demolished existing dwellings.

      For instance:

      Although Jon is not a resident in the country, he is interested in purchasing a newly built property. One of the homes that was formerly located on the land had been demolished by the owner, who had subsequently constructed a new home in its stead. Since it was reconstructed, neither the owner of the property nor the tenant have used the residence since it was completed.

      In this particular scenario, the house does not truly contribute to the growing housing supply in Australia. To ensure that the sale of the property is conducted in a manner that is consistent with Australia's national interest, the residence in question will not be labelled as a new dwelling under the country's foreign investment framework. Due to the fact that Jon is a non-resident of the country, it is highly unlikely that his request to purchase the home will be granted.

      Purchase of a brand-new (or almost brand-new) home within a development is exempt.

      Developers who are in possession of an exemption certificate for new (or nearly new) dwellings are granted permission to sell new (or nearly new) residences to foreign nationals within the development that is specified on the exemption certificate. When a developer holds this certificate, a foreign resident perhaps will not be required to obtain a separate approval. The developer should provide the foreign non-resident with a copy of the exemption certificate for the property that the foreign non-resident intends to acquire from them. If the exemption certificate already covers the intended transaction, then there is no need for them to submit a separate application for approval to make a foreign investment.

      Empty land

      In most cases, non-resident aliens from other countries will be allowed to buy unoccupied land for the purpose of developing residential buildings, but this right is not without some limits. In most cases, the requirements consist of the following:

      • Construction must be completed within four years of the date on which permission was granted;
      • Within thirty days following the delivery of the documents, verification that the residences have been finished must be submitted. It's possible that we'll include a builder's completion certificate or a final occupancy certificate.

      In extreme circumstances in which the development cannot be completed within the allocated four years, the non-resident foreign investor may submit a request for a revision to the requirements. At the very least, a variation request needs to be handed in two months before the period in question comes to an end. There will be a fee associated with this service. On an individual basis, we will evaluate and take into account any necessary variations.

      In general, for the purposes of Australia's foreign investment framework, land that is currently unoccupied but has previously been used to house a habitation will not be considered vacant. As a consequence of this, non-nationals will often be prohibited from purchasing land that has never been developed and that has historically been occupied by a structure (unless they are proposing to construct multiple dwellings on the land which will increase the housing stock).

      Existing homes for redevelopment

      Foreign non-residents are generally authorised in Australia to purchase an existing home for the purpose of renovating it, provided that the redevelopment truly contributes to an expansion of the housing stock. In most cases, requests of this nature are complied with, but only under the following conditions:

      • Before the current home is torn down and replaced with a new one, it will not be possible to rent it out.
      • The old house is demolished and the construction of the new homes begins within four years of the date the authorisation was granted;
      • Within thirty days of the application's receipt, the applicant is required to provide evidence that the dwellings have been finished. It's possible that we'll include a builder's completion certificate or a final occupancy certificate.

      In general, non-resident foreign buyers will not be allowed to purchase an existing home with the goal of converting it into a single family dwelling for themselves.

      Established homes

      An established home is a residence that was built at some point in the past and is currently located on residential property.

      Hotels, motels, and RV parks are some examples of commercial and residential establishments that are not included in the definition of an established habitation. This is because these types of properties serve both commercial and residential purposes. In addition, the purchasing of particular student housing, retirement communities, and senior care facilities are each subject to their own distinct sets of laws.

      It is against the law for non-residents of the country to purchase an existing structure in order to use it as a primary residence, holiday house, or rental property.

      It is possible for non-Australians who run large enterprises in Australia to submit an application to buy existing properties for their employees who reside in Australia. Applications that fit the criteria are often approved with restrictions, such as the need that the house be sold if it would likely be vacant for more than six months. One example of this is the requirement that applications be submitted online. The ability of a firm to buy pre-existing residences and use them to provide housing for its workers who are working in Australia is contingent on a number of different factors.

      Certificates of exemption for residential land (other than established dwellings)

      Foreign buyers can submit an application for a residential land (other than established dwellings) exemption certificate in order to purchase one unspecified property (other than established dwellings), such as new (or almost new) homes and vacant residential land. This allows foreign buyers to purchase one unspecified property (other than established dwellings).

      With this certificate, non-australian residents only need to pay a single fee in order to apply for the certificate, and they are exempt from the need that they seek separate approval for any property that they are interested in purchasing. For the purpose of purchasing the residential property, any strategy is acceptable (such as auction, ballot, private offer, expression of interest, or tender). There is a prohibition on entering into any agreements, even conditional ones, prior to the receipt of the exemption certificate.

      Any exemption certificates are typically subject to the same restrictions as regular licences, including the need that the foreign person disclose any purchases made with the exemption certificate.


      The submission of a request for authorisation to purchase residential property will not be taken into consideration before the applicable application fee has been paid in full.


      In the event that the foreign investment restrictions that Australia has in place are violated, severe consequences, including as civil and criminal penalties, as well as disposal orders, may be applied.

      Instances of non-compliance with Australia's foreign investment framework may be brought to the attention of other Commonwealth ministries, such as the Department of Immigration and Border Protection, as well as organisations that are responsible for law enforcement.

      Step 6 – Make the purchasing price a bargain

      Up to ten percent less than the asking price is what Australian real estate normally sells for on average, on average.

      Depending on the market, region, and type of property, this varies. To learn more about the market you are interested in, look up the suburb profiles on realestate.com.au.

      When it comes time to sell a home, houses located in desirable suburbs typically command higher prices.

      A "discounting percentage" is the typical percentage that a home sells for below the asking price, and some real estate websites may publish this information for particular suburbs using the term.

      If you are using a buyer's agent, they will help you negotiate the price and get the best deal possible.

      You have the option of requesting a contract and then asking your lawyer or conveyancer to look it through and, if necessary, add any further limits before you sign it.

      You have the option of cancelling the contract by saying that the transaction is "subject to permission from the FIRB" in the extremely rare event that you do not acquire consent from the Australian government.

      Make use of the skills of your conveyancer or solicitor to guide you through the maze of property rules that exist in each of the Australian state's jurisdictions. They are available to assist you with that matter.

      In the event that the seller does not offer a cooling-off period, you are free to put down a holding deposit and sign the contract.

      It is strongly recommended that you discuss the possibility of incorporating a two-week cooling-off period into your contract with your conveyancer.

      A subject to finance provision may be more common in some jurisdictions, but it provides a lower level of protection to the parties involved than does a cooling-off period.

      Your conveyancer or solicitor will inform you, when it is safe to sign the contract to acquire the property, what checks you need to do before making the purchase. This is to ensure that the property is being sold legally (contract of sale).

      If you are unable to acquire a loan during the cooling-off period, the maximum penalty is the holding deposit, which can often be as high as one thousand dollars.

      Once more, we ask that you verify this information with your attorney or conveyancer because the laws surrounding this topic might vary from state to state.

      Step 7 – The formal approval of the mortgage

      When you have decided on a house to buy, you can then send the sales contract to your mortgage broker so that they may begin the process of giving you the formal okay to buy the house.

      Always keep in mind that you shouldn't make a purchase commitment until your mortgage application has been formally approved.

      There is a possibility that the real estate agent will put pressure on you to sign the contract because there are "other purchasers," but the only time you should do so is if there is a cooling-off period in place.

      Once we have the sales contract in our possession, we will be able to give it our official stamp of approval within one week.

      Step 8 – Contracts are exchanged, and your deposit is paid

      You will be able to exchange your contract once the lending agreement has been formally accepted and you have received approval from your attorney or conveyancer.

      In most cases, you will be required to provide a deposit of ten percent.

      The required amount of the deposit is not a fixed sum and might differ from state to state.

      In light of the fact that you will be unable to back out of a property transaction after you have committed to it, you should get the advice of a lawyer before signing any contracts or making any payments.

      Signing the sales contract

      The Contract of Sale will be drafted by the attorney for the developer, who will then submit it to your attorney in Australia. Your attorney in Australia will analyse it and include a summary of the deal in his or her report. After that, the Contract of Sale will be delivered to you by a messenger service. Kindly take the following into consideration:

      Timeline: In light of the fact that the delivery of the documents by international courier will take some extra time, an extension of the deadline for you to sign and return the Contract of Sale has been arranged. Make sure that the deadline, which is specified in the Contract of Sale, is given the attention it deserves (usually 10-21 days). If the fully executed Contract of Sale is not received within the specified amount of time, the seller will advertise the property for sale.

      Be sure to follow the instructions given by your attorney regarding the proper way to sign and return the contract on each page. Make a note of the tracking number that the courier provides you with so that you can monitor the delivery of the box as it moves through the delivery system.

      10% down payment: The 10% down payment should be paid according to the terms outlined in the contract of sale that you have. In most cases, you will be required to transfer the deposit via either an international wire transfer or your own personal bank.

      Once all of the aforementioned requirements have been completed, your Australian lawyer will let you know when the property has officially been "exchanged."

      Step 9 – Obtain FIRB permission

      It is essential that the contract you sign include the words "subject to FIRB approval," which allows the board to make a decision after having 30 days to consider it.

      At this juncture, it is essential to verify with your conveyancer or attorney that the clause is structured in a manner that would ensure you will not lose your deposit in the event that your FIRB proposal is rejected.

      The filing of an application with the FIRB is a basic process, and in most cases, your conveyancer will take care of it for you.

      It's possible that your lender will want to see a copy of the approval in order to move forwards with the loan.

      Step 10 – Final preparations

      After you have completed the deal, you are required to submit a copy of the signed contract to the FIRB for authorisation.

      Following the conclusion of the formal approval process, your financial institution would have sent you the loan paperwork.

      You can get assistance from your conveyancer or solicitor, and you can also ask your mortgage broker to go over everything with you. Both of these options are available to you.

      If you currently live outside of Australia and need to prove your identity or have the terms of your loan contract witnessed, you may be required to make a trip to the nearest Australian embassy or consulate.

      You have the option of appointing a reliable family member or friend who lives in Australia to act as your Power of Attorney (POA), and this individual will have the authority to sign the loan agreement on your behalf.

      The majority of agreements are drafted in language that is straightforward and easy to comprehend, despite the fact that you have the right to consult with an independent legal counsel regarding the terms of your loan arrangement.

      to take up the bank's offer of the loan, to complete the requisite signatures, and to return the loan documentation to the financial institution.

      On the day that the settlement will take place, you should perform one final inspection of your property. If you have hired a buyer's agent, that person is able to accomplish this for you.

      Step 11 – Settlement

      It is referred to as a "settlement" when the actual ownership of the property is transferred to you and when your loan is approved.

      Your conveyancer or solicitor will manage this in collaboration with your bank and mortgage broker. Your presence is not required for this to take place.

      Your lender is currently storing the title of the property while the keys to the property can be picked up from the real estate agent who is selling the property. If there are vacancies in the building, the management team of the property can begin advertising the apartment to people who might be interested in renting it.

      Settlement Method

      The "Settlement Date" refers to the day on which the last portion of the purchase price for the property in question is paid in full. After that, you will be handed the keys to your new house and officially become the owner of the property. In the event that the property is still in the process of being constructed, the settlement won't take place until after it has been completed.

      1. Financing for the property should, ideally, be arranged at least three months before the scheduled closing date;
      2. Transfer of funds: The remaining balance must be deposited into your attorney's Trust account at least one business day before the settlement date;
      3. Stamp duty is a levy that is required to be paid at the time of settlement in the majority of states. As a result, the funds need to be transferred to the Trust account maintained by your attorney;
      4. Inspection Conducted Prior to Settlement It is strongly recommended that you engage the services of a qualified building inspector a few days before the settlement so that they can conduct the inspection on your behalf;
      5. Property Valuation: If you want to find out how much your home is worth in today's market, you should engage an experienced valuer.
      6. Insurance - Before the settlement, we will make sure that you are aware with your contents insurance as well as your landlord's insurance;
      7. Management of the Property - Before the settlement takes place, a property manager will be appointed to begin advertising the rental unit and hunting for suitable tenants. It is in your best interest to have your property rented out as soon as the settlement is finalised;
      8. The day on which the last payment is received and the buyer gains title to the property is referred to as the settlement date.

      The moment when the buyer makes their final payment and is handed the keys to the property. Also known as "closing day."

      How do I go about administering the location?

      If you are purchasing the property with the intention of renting it out as an investment, you have two options available to you.

      The requirements for managing the property can be met by either you or a professional property manager.

      Qualified management agents will be in charge of taking care of every aspect of your tenancy.

      They are also accountable for the collection of rent, the maintenance of financial records, the execution of standard property inspections, the resolution of any problems that may arise, and the planning of any necessary repairs.

      The majority of landlords charge a management fee, which is normally between 5 and 10 percent of the monthly rent. This price is typically assessed to tenants (this is negotiable).

      You should also be prepared to pay additional one-time expenses in the event that they find a new renter or negotiate an extension of the lease.

      The majority of property managers are accommodating and do not increase the rent even when the market rate goes up.

      On the other hand, we strongly suggest that you talk to them once a year and question about whether or not the rent should be increased. A qualified property manager will keep in touch with you on an annual basis and provide a recommendation.

      Last but not least, before you sign any official agreements, please verify that the managing agent you are considering working with possesses a licence from the Office of Fair Trading. This should be done before you sign any official agreements (or state equivalent).

      The licence will be shown either in their physical location or on their website.

      Property Management

      Employing a property manager is the easiest and most convenient approach for overseas investors to handle the day-to-day management of their real estate holdings.

      A property manager will publicise your home, locate individuals who are a good fit for renting it, send out rental application forms, and draught up tenancy agreements. Through the handling of any emergent maintenance difficulties and the preparation and regular updating of cashflow reports, they will alleviate the burdensome labour that is associated with property upkeep.

      Who might be interested in renting my property?

      You would fit perfectly into the "Young Professional" renter profile we have available. This group, which normally ranges in age from 25 to 39, is financially secure and typically participates in a variety of social activities. You may expect getting your rent on time, and you will benefit from a long-term leasing arrangement that requires little upkeep on your part.

      These folks live in booming suburbs that are within a 10-kilometer radius of the city and provide a vibrant cafe culture, in addition to convenient access to shopping, entertainment, and transportation alternatives.

      They frequently look for a townhouse or apartment that has one bedroom and a parking spot and is located in a central location. Because they like to relax on the weekends and put in a lot of effort in both their employment and their leisure time, it is unlikely that they will want a garden that needs constant upkeep on their property.

      It is essential that the property you invest in appeals to the appropriate tenant demographic and blends in with the neighbourhood.

      What is the anticipated rental yield?

      Despite the fact that real estate in other major cities throughout the world experiences constant capital growth, rental returns are often quite modest. It is reasonable to predict rental returns of between 4 and 7 percent in major cities around Australia. The vacancy rates in Australia's major cities are at an all-time low of 1 to 3 percent, which indicates a substantial dearth of rental units available for occupancy. As a consequence of low vacancy rates, demand has been greater than supply, which has resulted to higher rental rates. This situation presents a terrific opportunity for investors who are looking to increase their capital while maintaining a stable cash flow.

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