Foreign Investing: Killer Tips for Purchasing a Property in Australia
Many people who visit Australia fall in love with this unusual country. So much that they decide they want to live there. There’s no doubt that Australia has a lot to offer, especially to foreigners who are amazed by this country’s beauty.
Needless to say, if you want to live in Australia, you’ll need to find yourself a home. Rentals are always an option, of course, but if you’re looking for a more permanent solution, you’ll have to consider purchasing a property.
Like in any other country, purchasing a property means going through layers of bureaucracy. That’s just an unavoidable step, unfortunately. This is especially true if you’re a non-resident of the Land Down Under.
However, where there’s a will, there’s a way. The important thing is to ask around, do a lot of research and get as familiarized as you can with everything that’s required of you to buy a property. With that in mind, here are a few killer tips for purchasing a property in Australia.
Create a budget
As you may already know, creating a budget to purchase a property in Australia will require more capital than the price of the property. Since you’re buying a home in a foreign country, you’ll have to create a budget that covers other expenses as well.
For example, you may need to hire a real estate agent, a lawyer, mortgage broker and so on. As mentioned before, you’ll have to go through bureaucracy to get your hands on a property, which includes paperwork, fees, permits, taxes, etc.
All of these factors cost money, of course, which is why you need to be ready. That’s why it’s essential to create a good budget that will help you pay for every expense that comes your way.
Create an investment plan
The next step is to consider where to invest and how. Australia is a large place, and you’ll have to pick a location that suits you the best. Furthermore, you’ll have to decide which type of property you want to invest in.
For example, you can invest in pre-construction properties, i.e., build a home from scratch or invest in newly built properties, such as apartments and townhouses.
However, if a property has already been built, you can only purchase it as long as the property has never changed ownership and has been vacant for at least 12 years. Therefore, here are a few factors you should focus on while developing your investment plan:
- Location
- Vicinity of the nearest commercial center
- Vicinity of the nearest amenities, such as hospitals, shopping malls and various other services
- The growth potential of the area
- Access to public transportation
- Property value in the area
Consult with the experts
As a foreigner in Australia looking to purchase a property, you’d need a lot of time to familiarize yourself with all the laws, regulations and rules. That’s why you should consider consulting with the local experts who already know everything there is to know and can easily help you out.
As mentioned before, you will need a lawyer, a real estate agent and so on and so forth. Aside from all that, you’ll have to consider consulting with experts regarding the property itself. For instance, investing in pre-construction properties can be a better option, since you get to build your home the way you want to.
In such cases, you’ll need to work with a team of experts who will provide you with reliable project management services regarding construction, inspection, safety and other relevant factors. In the end, it comes down to what you want and what you need, but collaboration with these professionals will come in handy nonetheless.
Get ready for the paperwork
This is the most exciting part of purchasing a home in Australia (No, it isn’t). Jokes aside, Australia, or better yet, the Australian government is very open to foreign investors. The entire process is fairly simple and seamless, so you won’t have to lose your mind over it.
Therefore, here are a few things you’ll need, as well as a few steps you’ll need to take to get your paperwork in order:
- Apply for the purchase permit with the Australian Foreign Investment Review Board (FIRB).
- Your application will take 30 days to be approved.
- Hire a lawyer from now on to cover all the legal necessities.
- Apply for a bank loan. Australian banks often lend up to 80% of the property value to foreign investors.
- Your lawyer will help review the Contract of Sale and help you with all the other paperwork.
- Stamp Duty – Some territories in Australia require that investors pay the stamp duty when investing in pre-construction properties.
- Aside from stamp duty, you’ll have to cover the so-called “Foreign Investor Levy”, which is an additional 7% of the property price in stamp duty.
- Apply for tax deductions.
- Apply for a mortgage.
- Get the necessary insurance.
As you can see, it’s not all that difficult for a non-resident of Australia to purchase a property there. However, there’s always a procedure to follow, which can be time-consuming and exhausting. That’s why you need to do your research first and get everything ready before you start investing so that you can make the entire process as seamless as possible.