Owning your home in Australia is a dream shared by many migrants. However, depending on your residency status, the rules for foreign persons are complex and subject to regular change. RHYGAN WERRETT from RMB Lawyers explains:
The first question to ask is whether you are defined as a foreign person.
Australian citizens are not foreign persons under any circumstances. New Zealand citizens and permanent residents may not be foreign persons provided they have actually been in Australia for 200 or more days in the 12 months prior.
However, individuals who hold temporary visas including visitor visas, bridging visas, business visas etc are considered foreign persons.
If you are deemed to be a foreign person holding a temporary visa, you must obtain approval from the Foreign Investment Review Board.
As a temporary resident, recent changes to laws have placed a two-year ban on the purchase of established dwellings. However, temporary residents may be able to purchase an unlimited number of investment or residential properties only if those properties are new dwellings – one that has not previously been occupied, is part of a development that is being sold by the developer or is vacant land with development to occur within four years.
For each of those purchases, temporary residents will either need to get specific approval for a property or obtain an exemption certificate. An exemption certificate will be valid for 12 months and will detail the conditions of the purchase, for example approval for the purchase of a single established dwelling below a monetary amount.
If you have already put an offer on a property purchase before receiving approval, we would strongly recommend that you insert a clause making the purchase conditional on approval.
You will need approval for each property purchase and this application is lodged through Online Services for Foreign Investors.
Once you have received your approval. You will be able to put an offer on a house and finalise the settlement. You should note that as a foreign person, you will also be subject to the usual stamp duty plus a Foreign Person Surcharge Duty (currently 9% of property value).
Finally, once you have completed your property purchase. You must register your purchase with the Register of Foreign Ownership of Australian Assets. This is similarly completed through the Online Services for Foreign Investors.
Each year thereafter, you must lodge a Vacancy Fee Return to confirm that the property remains your principal place of residence or (if a new dwelling) is still rented out.
If your property is no longer occupied in accordance with your purchase conditions, you will be required to sell that asset.
Foreign Investment in Australian property is a complex and expensive process to work through. At RMB we can guide you through the process and get you into the Australia property market.
At RMBMW we can guide you through this complex process and get you into the Australia property market.