Many foreigners buy property in Australia every year. A holiday home, investment property or new family home.

There are some restrictions for foreigners wanting to buy property in Australia, depending on your visa and residence status.

Find below some advice on how you can buy your dream home in OZ and some smart tips to avoid paying more than you need to in fees and charges.

What you will read on this page:

Can foreigners buy property in Australia?

Yes you can, but there are some restrictions. Non-residents have to get approval from the Foreign Investment Review Board (FIRB) before they can buy a property. However, the house must be for yourself as a home and be your primary residence.

If you don’t intend to live there full time, or if you’re buying several properties in Australia as an investment, they must be new-build properties. These laws are designed to ensure that there is a sufficient supply of new housing stock across the country.

What’s the Australian property market like?

If you’ve seen any news lately, you would have read that the Australian housing market is weak, broken and prices are falling. Analysts believe soft property markets, particularly in Sydney and Melbourne, may bottom out next year, amid the banking regulator loosening a constraint on mortgage credit and an expected official cash-rate cut.

I’ve listed below the median house prices in both Australia and New Zealand. I’ve included the unit prices in Australia, as they make up a lot of the Australian market.

Median House Prices in Australia

Capital City March 2019
Sydney $1,027,962
Melbourne $809,468
Brisbane $563,666
Adelaide $542,474
Canberra $722,440
Perth $529,997
Hobart $478,247
Darwin $514,546
National $748,217

Source: Domain House Price Report.

Median Unit Prices in Australia

Capital City March 2019
Sydney $696,935
Melbourne $466,892
Brisbane $372,852
Adelaide $312,459
Canberra $426,719
Perth $347,596
Hobart $363,418
Darwin $313,462
National $526,130

Source: Domain House Price Report.

Median House Prices in New Zealand

Region April 2019
Northland $507,000
Auckland $850,000
Waikato $550,000
Bay of Plenty $600,000
Gisborne $358,000
Hawke’s Bay $465,000
Manawatu/Wanganui $360,000
Taranaki $385,000
Wellington $615,000
Tasman $600,000
Nelson $540,000
Marlborough $427,500
West Coast $200,000
Canterbury $460,000
Otago $463,000
Southland $300,000
NZ excl. Auckland $495,000
New Zealand $585,000

Source: REINZ Statistics Table.

Home Price Guide

When you are buying a home it’s important to do your research. In terms of getting comprehensive comparative sales information, it’s hard to go past the Home Price Guide, available from Australian Property Monitors (APM), a joint venture between HWW Limited, the publishers of Your Mortgage Magazine, and John Fairfax & Sons.

The Home Price Guide list sales details of individual residential properties. Each standard guide lists monitored sales in the previous 12 months in the postcode of your choice. If the property you are purchasing is in the database, you can see how much the current owners paid for it, whether it has been put to auction since it was purchased, and in some cases what the highest bid at an auction was.

First Home Owners Grant (FHOG)

The First Home Owners Grant (FHOG) in Australia is designed to encourage and assist home ownership across the country, and for eligible borrowers it’s a great start to life as a property owner.

The grant differs in each state and territory and in most places it applies to new homes only and is valued between $7,000-$26,000.

The Australian government’s First Home Owners Grant (FHOG) and other benefits are available to permanent residents, as if they are citizens of Australia. Because NZ citizens are considered to be permanent residents of Australia they are eligible for the grant.

Read more here: https://www.movingtoaustralia.co.nz/are-new-zealand-citizens-eligible-for-australias-first-home-owners-grant/.

Getting a mortgage in Australia

Getting a mortgage in Australia is pretty similar to New Zealand. You will need to figure out how much you can borrow based on your income and expenses. You will need a deposit, which is usually a minimum 10 per cent of the value of the property. You also need to pay for stamp duty on the property, which will cost several thousands of dollars, depending on which state you live in.

Like NZ, different borrowers in the market off different deals, so make sure you do your research. Be proactive and contact lenders directly about deals on offer. Whether it’s a lower interest rate, zero establishment fees, frequent flyer points or other value-adds, the more you know about the current home-loan market, the better your negotiation skills when it comes to asking your lender for more product features or a lower interest rate.

Financial institutions in Australia will usually check your credit rating in New Zealand. If you are not sure where you stand, you can get a free copy of your credit file from Equifax: https://www.equifax.co.nz/personal.

Stamp Duty

Stamp duty is a tax on a property transaction that is charged by each state and territory, the amounts can and do vary. The stamp duty rate will depend on factors such as the value of the property, if it is your primary residence and your residency status.

You can calculate the stamp duty you may have to pay on your property using this stamp Duty Calculator: https://www.realestate.com.au/home-loans/stamp-duty-calculator.

Capital Gains Tax (CGT)

If you own an asset overseas, you may have to pay Australian tax when you sell the asset. You need to keep appropriate records.

If you acquired an overseas asset before you became an Australian resident, you are taken to have acquired the asset at the time you became a resident.

Similarly, if you stop being an Australian resident while holding an overseas asset, you are deemed to have disposed of that asset at the time you stop being a resident.

To accurately calculate the capital gain or loss, ensure you keep a record of the value of your asset at these times. This is a complex area of tax law and exemptions may apply.

Therefore, if you plan on renting your home while you settle in Australia, you will have to pay CGT when you sell it. If you sold it before you left you wouldn’t.

However, your accountant can make you a temporary resident for tax purposes, which would make you exempt from tax on their overseas income. Read more here: https://www.beyondaccountancy.com.au/something-every-kiwi-in-australia-needs-to-know/.

How to get the best foreign exchange rate and save on fees

If you already own a home in New Zealand and are planning on selling it and buying in Australia, then educating yourself on foreign exchange is a must. Same goes if you are transferring any money from NZ to Australia. Why throw away your hard earned cash.

To give you an idea of how much you could save, XE have done a recent comparison with three New Zealand major banks for a $1,200,000 NZD / AUD transfer. Depending on which bank you use, XE would have saved you between $9,070 and $25,870.

XE-BankRateComparison

**This comparison was made on 21.08.17, by speaking to the foreign exchange teams at 3 of the leading banks.

You will save a lot of money by using an online foreign exchange company, e.g. OFX or XE, to exchange your NZ Dollars into Australian Dollars, then deposit them in your Australian bank account. Banks will charge you a great deal to convert and transfer your money.

Find out more about using an online foreign exchange company and how it online money transfer works.

Where to find your new home

Of course you can start looking for your new home from NZ. The below websites are the top real estate sites in Australia:

Still got unanswered questions?

Ask them below in the ‘reply’ section and I will get back to you asap. You might also find the answers in the questions other visitors have asked.

5 Comments

  1. Monique

    July 8, 2019 at 9:19 am

    Hi MTA! Thanks for an informative site.
    I currently have a rental property in New Zealand and am moving to Brisbane in about a month’s time.
    In what way will owning property in NZ affect buying real estate in Queensland?
    For example, capital gains tax?
    Can I use equity in my NZ property?
    Can I buy an existing home, or do I have to build, or buy brand new?

    Thanks for your assistance 🙂

    Reply
    • JJ Smith

      July 24, 2019 at 12:24 am

      Hi Monique,
      Thank you for your comment. It is a very good question!
      Owning a rental property in NZ won’t affect you buying a home in Australia or even applying for first home owners grant (FHOG). However, the FHOG only applies to new homes (https://www.movingtoaustralia.co.nz/are-new-zealand-citizens-eligible-for-australias-first-home-owners-grant/).
      You can release equity in a property in NZ to buy in Australia, but it will involve two separate home loans. Firstly, you need to refinance your mortgage in NZ in order to release equity. This is something you must get with your bank in New Zealand to complete. The other home loan will be in Australia with an Australian bank or lender to buy a property using the equity from your NZ property as a deposit. Read this post which explains the above in detail: https://www.homeloanexperts.com.au/non-resident-mortgages/new-zealand-citizen-mortgage/.
      Regarding tax obligations read this article: https://www.beyondaccountancy.com.au/something-every-kiwi-in-australia-needs-to-know/. It outlines the obligation of a Australia resident, temporary resident or non resident, including capital gains tax on NZ based rental properties. You see, temporary residents are generally exempt from tax on their overseas income. Contrast this with permanent residents or Australian citizens. As long as we remain residents for tax purposes we have to pay tax on any source of income, foreign or domestic.
      Another area you want to research is foreign exchange. As you are considering buying in Australia, you will save hundreds to thousands with rates that the banks will never match: https://www.movingtoaustralia.co.nz/money/foreign-exchange.
      Please feel free to email me back any further questions you have.
      Good luck with your move.

      Reply
      • Monique

        August 12, 2019 at 12:57 am

        Thanks so much for your reply. Thats a very useful link to the accountants site, thankyou, I will remember that. And good to know that all going well I won’t be taxed on capital gains or rental income in NZ. Sounds like I will have to get a good accountant to help me tho! I won’t be in Australia for ever, and will likely move back to NZ in a few years or so.
        Thanks so much for your other recommendations abut transfers etc.
        So kind of you to help people like myself!
        Thanks again
        Have a great weekend 🙂
        Kindest Regards
        Monique

        Reply
  2. Caroline

    June 26, 2019 at 2:51 am

    Hi,
    Thank you for this newsletter.
    We are starting to look at this aspect of things now.
    One thing I’d like to know: in NZ, we have leaky buildings and we do need to do our due diligence prior to purchasing the house.
    I guess it’s good practice to get a lawyer and a building inspection anyway, but is there anything suck as leaky buildings or suspicious builds that we need to be aware of?
    Thank you again for your help,
    Best regards

    Reply
    • JJ Smith

      June 26, 2019 at 2:52 am

      Hi Caroline,
      Thank you for your email.
      I have done some research and there are cases of leaky homes in Australia. Not to the same level as New Zealand and Canada.
      Therefore, I would recommend getting a building inspection before buying a home in Australia. It’s always best to know what your getting into when spending hundreds of thousands of dollars.
      Good luck with your move.

      Reply

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