What is involved when non residents buy Australian property from overseas?

We understand the difficulties foreign investors may experience when trying to, not only buy a property from overseas, but also having to finance their investment through a local bank. Distance, language and time differences can make it even harder to complete your transaction smoothly.

You need someone on the ground to help coordinate your property transaction, and this is where a Citiwide Consultant can provide you with considerable help and advice.

For example, you will be given secure access to our Web Portal so that you can follow up the progress of your loan application whenever you need to. This is very convenient given the difficulties time differences can create.

Also, as we offer a '1 Stop Shop' service, you can manage all your property transfer needs (Conveyancing) and property insurance with a single point of contact.

But here’s some useful information which will hep you get started:

The Australian Government, through the Foreign Investment Review Board (FIRB), regulates the sale of Australian property to overseas persons and corporations. Australian citizens living abroad who are holders of permanent visas or entitled to hold a 'special category' visa can purchase property in Australia without being examined by the FIRB.

The term 'non-resident' for lending purposes applies to a person who:

• Permanently resides out of Australia and is not an Australian citizen;
• Is an Australian citizen that has been living and working out of Australia for more than 6 consecutive months;
• Is not an Australian citizen but has been residing in Australia for less than 6 consecutive months.

What is foreign investment?

The Australian Government's foreign investment policy has been developed to encourage investment in Australia and ensure that foreign 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. Australian Citizens and Permanent Residents can acquire any property in Australia.

Foreign investment or a foreign interest is briefly described as a corporation, business or trust in which a foreigner and any associates have 15% or more ownership or in which several foreigners have 40% or more aggregate of the ownership.

There are various forms of investment and proposals with regard to foreign investment in Australian real estate.

These include the acquisition of:

1. Developed commercial real estate valued at AUD$5 million or more.
2. Residential real estate - irrespective of size.
3. Residential real estate - irrespective of size - unless exempt under regulations.

Development

Proposed acquisition of real estate development (within 12 months) is normally approved unless it is contrary to national interest.

Residential

Foreign interests are usually given approval to buy vacant residential land on condition that construction of a dwelling is to commence within 12 months. 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 includes:

1. Foreign companies buying residences in Australia for their senior executives
2. Foreign nationals temporarily resident 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.
3. Foreign nationals purchasing residential real estate as joint tenant with an Australian spouse.