A big part of feeling completely invested in a country is owning a home there. It gives you roots and is evidence of your commitment to that country. It is also one of the best and most important investments you will ever make. But if you are planning on migrating to Australia you might have asked yourself how you go about buying a house as a temporary resident in Australia.
If you’re a temporary resident, you’ll need to jump through a number of hoops to buy property in Australia. To begin with, you must be granted permission from the Foreign Investment Review Board (FIRB) to purchase a property. To do this, you’ll need to apply to the board for approval, which can take up to 40 days.
You will be able to obtain a foreign investment application form from the Australian Taxation Office.
If you’re a permanent resident however, you’ll find it much easier to buy property in Australia, and won’t require permission from the FIRB to purchase a home.
While you can exchange contracts before you’ve received FIRB approval, the contract is, of course, conditional on that approval being granted. Unfortunately, as auction bids can only be made without conditional clauses, this will prevent you from purchasing a property at auction.
Once contracts have been exchanged and a cooling-off period served, you’ll need to pay a deposit on your home. You’ll probably need to sort out a home loan as well, so it’s important that you’ve got records of your credit history and financial situation with you. Finding a mortgage with an Australian lender will generally be much easier than seeking financing from a lender back home. To increase your chances of being approved for a home loan, you’ll need to be earning a sufficient regular income to prove that you can manage your ongoing loan repayments. If you don’t have a steady stream of income, your chances of being approved for a loan are slim. Once again, permanent residents will find it much easier to obtain a loan than temporary residents.
In addition to your deposit and mortgage, you’ll need to remember that certain fees and taxes apply when buying a property in Australia. As a general rule of thumb, you can expect these costs to add up to roughly five per cent of the property’s value. You’ll need to contend with a Land Transfer Registration fee, legal fees, mortgage fees, local taxes and perhaps even insurance. Other costs can also be incurred via things like strata inspections or termite and pest inspections.
Remember; an application for approval to purchase residential real estate will not be considered until the relevant application fee has been paid in full.
One final point to remember is that you’ll need to have any necessary visas and work permits before you can buy a home in Australia. Residence, temporary residence, migrations and visitors visas are all available, so make sure you have the necessary paperwork before you proceed.
The Australian Government also applies strict penalties (including civil and criminal penalties and disposal orders) in the case of contract and rules breaches.