If you are looking to purchase property in Sydney but do not live in Australia, you are still eligible to purchase – the process just takes a little more time. The Australian Government’s foreign investment policy has been developed to encourage investment in Australia and ensure that such investment is consistent with the needs of the Australian community. The Government recognises the important contribution offshore investment makes to the development of Australia’s industry, resources and community.
A foreign investment is defined as:
- a person, not an Australian resident, buying property
- a business or corporation where a non-resident or noncitizen owns 15 per cent or more of a property, or more than one foreigner has 40 per cent or more aggregate of the ownership.
Overseas buyers usually fall into one of three categories:
- Australian permanent residents who are currently living overseas and want to buy an investment property in Australia.
- Non-citizens or non-permanent residents living in Australia who want to buy property in Australia.
- Non-permanent residents not living in Australia who want to buy property here.
If you are a non-resident purchasing property in Australia from overseas, you are required to obtain approval to purchase from the Foreign Investment Review Board (FIRB) prior to taking out an actual home loan application. The Foreign Investment Review Board is an Australian Government entity that regulates the sale of Australian property to overseas persons and corporations.
Non-residents purchasing vacant residential land
If you’re a non-resident wishing to purchase vacant residential land in Australia, you will usually be granted approval on the condition that you will commence construction of the home within two years of purchasing. Approval will also usually be granted to buy home units and townhouses off-the-plan, under construction or newly constructed (but never occupied), on condition that no more than half of the units in any one development are sold to foreign interests.
Other situations where approval is normally granted include:
- foreign companies buying residences in Australia for their senior executives
- foreign nationals temporarily residing in Australia for more than 12 months, buying for their own use as a principal place of residence, subject to the sale of the property when they cease to reside in Australia
- foreign nationals purchasing residential real estate as joint tenant with an Australian spouse.
Income Tax and Capital Gains Tax on your Australian property investment
It is a requirement for non-residents to account for Income Tax and Capital Gains Tax on Australian property investments. There are tax incentives available in Australia, but you should check the Foreign Investment Review Board site for details or talk to a mortgage broker who has a good understanding of offshore investing.
For further information please refer to the following link: http://www.firb.gov.au/content/real_estate/residential.asp
Disclaimer: We make no representations or warranties of any kind, about the accuracy with respect to this information. Please refer to the above link for all current information and updates.