Buying a house in Australia | Moving to Australia

Are you a New Zealander wanting to buy a house in Australia? Yes, you can! If you're an NZ citizen buying property in Australia, everything works the same as if you were an Australian citizen buying property in Australia. You may even be eligible for the first homeowner's grant. However, if you are not an NZ citizen, depending on your visa and residence status, there are some restrictions for foreigners wanting to buy property in Australia. Find below some advice on buying your dream home in Australia and some smart tips to avoid paying more than you need in fees and charges. Please note: I am not a financial adviser, accountant, mortgage broker, or property specialist. I have collated all the information in this post online. Please get financial advice from a specialist if needed. KiwiSaver and First Home Super Saver (FHSS) Use your KiwiSaver towards your home deposit for your first Australian home! First Super and First Home Super Saver (FHSS) – lets you withdraw some of your KiwiSaver for the deposit for your Australian first home. Read more here. In this post, you will find helpful information on: Can foreigners buy property in Australia? Where to search for homes Home Price Guide What deposit will I have to pay? Do New Zealanders have to pay a higher interest rate? First Home Owners Grant (FHOG) Getting a mortgage in Australia What documents do you need to apply for a loan? Accessing the equity of your property in NZ Can I use my NZ KiwiSaver to buy a house in Australia? Stamp Duty Stamp Duty Waiver Capital Gains Tax (CGT) CGT Main Residence Exemption Australian temporary resident for tax purposes Transferring your money to Australia Buying property in Australia from New Zealand Foreign Buyer The process of buying a property in Australia from NZ Get an expat mortgage Hire a conveyancer RealEstate.com.au Can foreigners buy property in Australia? Yes, you can do so as an NZ citizen living in Australia with an SCV. As an NZ citizen living in Australia, you are treated as an Australian citizen when it comes to buying a home. You can get a mortgage at the same rate and are eligible for the First Home Owners Grant (FHOG) and a possible stamp duty waiver. There are some restrictions if you are a non-resident, e.g., an NZ citizen not already living in Australia (who hasn't processed through border control and received their SCV). Non-residents must get approval from the Foreign Investment Review Board (FIRB) before buying a property. The house must be your primary residence and for you as a home. This does not apply to NZ citizens living in Australia. If you don’t intend to live there full-time or buy several properties in Australia as an investment, they must be new-build properties. These laws are designed to ensure a sufficient supply of new housing stock across the country. However, suppose you want to purchase a property in NSW. In that case, you must have been living in Australia for at least 200 days within 12 months before the contract date to be exempt from the 8% surcharge purchaser duty on top of any transfer duty. Read more in my surcharge purchaser duty law change post. Where to search for your new home Of course, you can start looking for your new Australian home from NZ. The top two real estate websites in Australia are: Realestate.com.au Domain.com.au Home Price Guide When buying a home, it's essential to conduct thorough 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 lists 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. What deposit will you have to pay? Your deposit amount will vary depending on whether you are living in NZ or Australia. If you are living in NZ, your deposit will be approximately 30%. If you have moved to Australia and are living there, you should be able to buy a property with only a 5% deposit. If you are living elsewhere, it's quite challenging to purchase a property in Australia, as it's considered non-resident lending. Banks in Australia can't lend on property in New Zealand, so if you have an existing property in NZ you want to leverage off, you're going to have to talk to your NZ bank or a mortgage broker in NZ. Read more below. Do New Zealanders have to pay a higher interest rate? No. If you are a New Zealand citizen living in NZ or Australia, your interest rates will be the same as the open market, e.g. the same as if you were an Australian citizen. First Home Owners Grant (FHOG) The First Home Owners Grant (FHOG) in Australia is designed to encourage and assist home ownership across the country. 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. FHOG does not take into consideration NZ property, only property you've owned in Australia. Read more in my Are New Zealand citizens eligible for Australia’s First Home Owners Grant? post. Getting a mortgage in Australia Obtaining a mortgage in Australia is similar to that in 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 of 5 per cent of the property's value. You also need to pay for stamp duty on the property, which will cost several thousand dollars, depending on which state you live in. Can you get a mortgage right now? Want to know if you are likely to get a loan right now? UNO has created a questionnaire where you can input your financial information and determine if you are currently eligible for a home loan/mortgage in Australia. You will be asked about your residence status, where you currently live, what your plans are, how much you plan on spending on your new home, your deposit amount, and your income, to help calculate your loan-to-income ratio (LIR) and point you in the right direction. The questionnaire takes about 30 seconds, and there is no obligation; you can come back and complete it as many times as you like as your moving to Australia process progresses and your individual circumstances change. Run Your Numbers Or read my Australian mortgage post and find out more about UNO and how they can help you. Financial institutions in Australia will usually check your credit rating in New Zealand. If you are unsure about your credit file, you can obtain a free copy from Equifax. What documents are required to apply for a loan? To ensure your application is processed as quickly as possible, it is essential to have all your paperwork ready. You'll need: Bank statement Payslips Meet identification requirements You will likely be asked to complete an identity check by your conveyancing practitioner for land or property, which can be done at an Australian Post shop. Read more about identity checks and the ID requirements you need to meet on the Australia Post website, identity checks for buyers & sellers. Accessing the equity of your property in NZ If you own a property in NZ and want to leverage it. You need to get your NZ bank to release the equity in your NZ property (refinance your mortgage) so it can then be used as a deposit for your property in Australia. Australian banks are unable to lend on New Zealand property. Although we have similar banks in both countries, their systems are completely different and don't communicate with each other. So you are going to have to apply for a loan in NZ and a loan in Australia to be able to leverage the equity. Can I use my NZ KiwiSaver to help buy a home in Australia? Yes, you can! There is a significant history behind this, but once again, New Zealanders moving to Australia are able to transfer their KiwiSaver to Australia and use some of it as a deposit for their first home. You must meet the criteria set out by the ATO and ensure that you set up the correct account with the appropriate super fund provider. The ATO says, ‘If you transfer an amount into an Australian super fund from a KiwiSaver scheme, the amount will be an eligible contribution (except for certain amounts)’. There is no requirement for you to be an Australian citizen, Australian resident or an Australian resident for taxation purposes for the FHSS. Find out what the ‘certain amounts’ are, what super fund provider you need to register with, what you need to know about the First Home Super Saver (FHSS), the KiwiSaver to super fund transfer process and how to withdraw $15,000 to use as your first home deposit in Australia (up to $50,000) in my KiwiSaver and First Home Super Saver (FHSS) post. Stamp Duty Stamp duty is a tax on property transactions that is charged by each state and territory and is remitted directly to the state government. The amounts can and do vary. The stamp duty rate will depend on factors such as the property's value, whether 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. Stamp Duty Waiver First-time homeowners purchasing in Australia will likely be eligible for a stamp duty waiver. However, it will take into account whether you own or have owned any property anywhere, including New Zealand. So, if you have owned or currently own a property, you won't be eligible for the stamp duty waiver. There are different purchase amounts that need to be adhered to depending on the state you are buying in, e.g. in Queensland, if you purchase a home for $500,000 or less, you will pay no stamp duty. If you are purchasing a property between $500,000 and $550,000, you get a discount. Stamp duty varies from state to state. You can read more about the stamp duty in the state you are planning to move to, including its exemptions and concessions, here in this article: Getting the most out of stamp duty exemptions in your state. Capital Gains Tax (CGT) If you own an asset overseas, you may have to pay Australian tax when you sell it. Therefore, you need to keep appropriate records. If you acquired an overseas asset before becoming an Australian resident, you are taken to have acquired the asset at the time you became a resident. Similarly, if you cease to be an Australian resident while holding an overseas asset, you are deemed to have disposed of that asset at the time you cease to be 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 (including the CGT main residence exemption below). However, your accountant can make you a temporary resident for tax purposes, exempting you from tax on your overseas income. To understand this strange loophole, I recommend you read Beyond Accountancy’s post: NZ taxes: something every Kiwi in Australia needs to know. Calculating your CGT If you sold assets during the year, such as property or shares, you need to work out your capital gain or loss for each asset. You pay tax on your net capital gains. You can use the CGT calculator on the Australian Government ATO website. CGT Main Residence Exemption In Australia, your family home (main residence) receives favourable tax treatment. Most importantly, it is exempt from Capital Gains Tax (CGT), and this exemption can extend to your New Zealand home if it continues to be treated as your main residence. This means you don’t need to rush into selling your NZ property when you move. Under the 6-year rule, you can keep treating it as your main residence for up to six years, giving you time to sell your NZ home before buying a new property in Australia. You can read more about the CGT main residence exemption and the 6-year rule, including how to apply it in your tax return, on the ATO website. Australian temporary resident for tax purposes As mentioned above, as a New Zealand citizen living in Australia, you can choose to be an Australian “temporary resident” for tax purposes. There can be some benefits for New Zealand citizens living in Australia who are considered temporary residents for tax purposes. This is because, as temporary residents, they may be eligible for certain tax concessions and exemptions, including: Lower tax rates on their Australian income: Temporary residents are only required to pay tax on their Australian-sourced income, and their tax rate may be lower than that of permanent residents. Exemption from capital gains tax on foreign assets: Temporary residents are generally exempt from paying capital gains tax on assets they own outside of Australia. Exemption from the Medicare Levy: Temporary residents are exempt from paying the Medicare Levy, a tax levied on most Australian taxpayers to help fund the public health system. However, it’s essential to note that these benefits depend on individual circumstances and may not be applicable to all temporary residents. It’s always best to consult a qualified tax professional who can provide tailored advice based on your situation. Transferring your money to Australia Find out how to get the best foreign exchange rate and save on fees. If you already own a home in New Zealand and plan to sell it and buy in Australia, then educating yourself on foreign exchange is essential. The same goes for 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 has compared three major banks in New Zealand for a $1,200,000 NZD / AUD transfer. XE would have saved you between $9,070 and $25,870, depending on which bank you use. **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 to exchange your NZD for AUD and then deposit them in your Australian bank account. Banks will charge you a great deal to convert and transfer your money. Read more about using an online foreign exchange company and how online money transfer works. Buying property in Australia from New Zealand Do you want to purchase a home in Australia from New Zealand, ready for you to move into when you arrive? Yes, you can, but there is an extra tax to pay, and you will need some help... Foreign Buyer If you are purchasing property in Australia from NZ, you are considered a foreign buyer and must pay a stamp duty surcharge of 7% to 8% (varies from state to state). Property purchases in the Northern Territory, the ACT, or Tasmania are exempt from foreign buyer stamp duty. The rule is that if you are a New Zealand citizen residing in Australia and hold a special category visa (SCV) under the Migration Act 1958 (which most New Zealanders do), you are exempt from paying additional foreign taxes. If you are a New Zealand citizen residing in New Zealand and enter into a contract to purchase land in Australia, you will not be a holder of an SCV and must pay the additional surcharge of 7% to 8%. If you plan to take a plane trip to sign the contract and avoid paying the duty, think again! AFAD will also apply if the evidence indicates that the purpose of entry into Australia is to avoid paying AFAD by obtaining an SCV. Therefore, you are required to get approval from the Foreign Investment Review Board (FIRB) before purchasing a property, be prepared for the additional 7-8% tax, and are generally only allowed to buy new dwellings or off-plan properties, such as apartments and houses, that have not yet been lived in. Vacant land that can be developed is also permitted to be purchased as a non-resident. The Australian Taxation Office (ATO) offers online services for foreign investors to manage their obligations related to Australian investments. In addition to the application form, you'll be required to pay an application fee that is dependent on the cost of the new property or vacant land you wish to purchase. Once submitted, it generally takes less than 30 days for your application to be approved or declined. The process of buying a property in Australia from NZ While I wasn't able to find the process online, UNO Home Loans explained that to purchase property in Australia, engaging in mortgage and conveyancing services was fundamental. When buying property, the sale-to-settlement process can become complicated and overwhelming quickly. Conveyancers save you time and money, taking care of important legal documents such as contracts and site visits so you can quickly and easily move into your new home. There are various ways to approach this, but this is one method. Before approaching the companies below, ensure you've researched the type of home you want and its associated costs. The process to buy property in Australia from NZ: Get your team organised - you will need a conveyancer or lawyer, an insurer, and a mortgage broker or bank. Get pre-approved for an expat loan - it's essential to confirm your finances and obtain pre-approval before you become serious about a property. Make sure you meet FIRB qualification criteria as a non-resident investor and that you are prepared to pay their application fees when ready. Find the home you want to buy - you're going to have to rely on online research. Get a property inspection done - since you can't visit the property yourself, you need someone else to inspect and research it thoroughly so you can make informed decisions. Negotiate the best purchase price for the method of the sale being used - the home might be going to auction or tender, but a conveyancer can approach the real estate agent on behalf and negotiate directly with them. Check over the sale and purchase agreement - you can use a conveyancer or lawyer to do this. Make sure you know exactly what you are agreeing to. Sign the agreement from NZ and plan for settlement day - organise a pre-settlement inspection and make sure your finances and insurance are in order. We recommend the companies below. They have excellent independent reviews, so you can trust their team, charges, and processes. Get an Expat Mortgage If you want to buy a home in Australia while still living in New Zealand, you will need to get an expat mortgage. This is one of the most challenging home loans to obtain. Obtaining a home loan depends on several factors, including your household income, country of residence, deposit amount, and whether your circumstances align with the different bank policies. All banks in Australia have different policies and calculations they use to evaluate a loan application. This is where UNO comes in! What UNO does for you is assess your individual circumstances, determine which banks are most likely to lend to you, and then approach them on your behalf. UNO proactively look after customers’ largest household expense, their mortgage and or /home loan. Using loan score technology, UNO analyses your mortgage to save you time and money wherever possible. As experienced brokers, their job is to negotiate the best mortgage deal on your behalf. UNO prides itself on matching customers to the right home loans across its growing panel of 20 lenders, whether you are purchasing a property or refinancing. Plus, they’re specialists in helping New Zealand citizens to buy Australian property, whether based locally or in Australia, so they’re familiar with the process and how they can best serve your needs. Find out if you’re eligible for an Australian expat mortgage Do you want to know if you’re eligible to buy a property in Australia from NZ? Do you want to move straight into your own home in Australia? Simply complete this 30-second questionnaire and find out if an Australian bank will give you an expat mortgage. You will be asked about your residence status, where you currently live, what your plans are, how much you plan on spending on your new home, your deposit amount, and your income, to help calculate your loan-to-income ratio (LIR) and point you in the right direction. The questionnaire takes about 30 seconds, there is no obligation, and you can come back and complete it as many times as you like… Run Your Numbers Or, if you’d prefer to speak with a real person, you can complete this short Buyer Readiness Quiz (just 30 seconds, 6 simple questions). You’ll receive personalised feedback on your situation along with guidance on your next best move. At the end of the quiz, you’ll have the option to book a free, no-obligation chat directly in Paul Davey’s diary. Paul is Moving to Australia’s dedicated mortgage broker, specialising in helping New Zealanders buy their new homes in Australia. He’s incredibly knowledgeable and genuinely helpful, and worth completing a little quiz to talk to! Buyer Readiness Quiz For more information on getting an Australian mortgage, UNO or Paul Davey, read my Australian mortgage post. Hire a conveyancer Conveyancers take the complication out of the property so you can save time and money where it matters most. From contract reviews to order searches and title transfers, conveyancers take care of the complex aspects of buying and selling, so you can buy with confidence and peace of mind. Whether you are buying property in Australia from NZ or while living there. While conveyancers can help you with an array of services, here are some of the most common: Improve the contract - before you sign the contract for your new home, it’s good to engage a conveyancer to review the agreement on your behalf. Conveyancers will identify any hidden clauses or issues that might cause you problems in the future while adding any important amendments to your contract. Conveyancers will also arrange for your agreement to be signed and finalised, allowing you to navigate the sale through to the settlement process in a quick and uncomplicated manner. Get the best deal – as experienced legal professionals with extensive industry knowledge about property law, conveyancers will help to negotiate the best possible settlement for you. They will also explain crucial details and information about your home that you might have otherwise overlooked, so you can make an educated and informed purchase. Don’t get stuck with debt - one of the biggest risks with buying property is the fact that potential for debt associated with a property to be transferred to you as the new owner. Conveyancers will make sure there is no outstanding debt, so you can settle without any hidden costs incurred later down the track. Get an expert opinion - buying a property might be the largest financial and emotional investment of your life, which is why it’s a great idea to engage in a building and pest inspection before settlement. From moisture contamination to construction issues and termites, a building and pest report provides you with a professional, expert opinion on your property, allowing you to buy with peace of mind. Saving you money and time in the long run, undertaking a building and pest inspection ensures you’re making an informed and educated purchase. The above companies will make buying a home in Australia from NZ a reality! RealEstate.com.au If buying a home in Australia is on your future wish list, do yourself a favour and subscribe to realestate.com.au. I receive their newsletter (my preferred way to stay informed), and almost every edition teaches me something new about the Australian property market. From affordable suburbs and market trends to first-home buyer tips and investment insights, it's a simple way to build your knowledge long before you're ready to buy. The more you understand the market before you arrive, the better positioned you'll be to spot opportunities and make informed decisions when the time comes. You might also be interested in… The below posts might interest you: Australian Mortgage First Home Owners Grant (FHOG) Find a House to Buy or Rent in Australia Still got unanswered questions? If you’ve read the above content and the answer to your question isn’t there, please write a comment below, and I’ll research the answer for you. Can I help you find something else? If you need advice on moving to Australia from New Zealand, I’ve created a helpful little questionnaire to point you in the right direction. It takes less than 30 seconds, so give it a go!