The legislation around buying an Australian property with a foreign income has recently changed, so here is what non-residents will need to do to invest in Australian property.
In recent decades, the Australian residential property market has been a favourite destination for foreign investors, especially Chinese buyers. Australia’s financial stability, together with a property market comparatively untouched by the volatility of speculation, has made the land down below a safe selection for these overseas investors.
However, legislation changes which took effect in 2015 have tightened the rules surrounding foreign investment in Australia, and it is now more complicated than ever to utilize the foreign income to buy Australian property. Let us take a look at ways to invest in Australian property as a non-resident.
Foreign investment regulation varies
Unlike some other nations that place few or no limitations on overseas buyers, Australia has ever taken a regulatory strategy to overseas property investors. In December 2015, after growing concern that Chinese buyers were driving up values and pricing for first home buyers from the property market, the Australian Government introduced new legislation to make it harder for overseas investors to buy Australian property.
Under the new legislation, non-resident buyers can buy new properties, not established ones. Companies breaching these rules can be fined up to $675,000, while buyers’ brokers and real estate brokers who assist foreign buyers violate these principles also face stiff penalties.
Besides those strict requirements, foreigners who wish to obtain an Australian investment property must pay an application fee. It then increases by $10,000 for every additional million dollars in real estate value. Paying this fee doesn’t guarantee that a buyer will have the ability to buy the property they desire.
So it’s advisable that you seek legal and taxation advice to be sure that you fulfil all regulatory requirements.