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Are you a New Zealander buying property in Australia?

Great! We all know tax can be a bit confusing, especially when you are dealing with another countries’ tax obligations. That’s why we put together this handy guide that all New Zealanders buying property in Australia should know!

Information you will find in this post:

What should I know about when buying a property in Australia?

First things first. As a New Zealander, you are classed as a ‘temporary resident’ for tax purposes in Australia.

This will however depend on your own personal situation, for example if you are residing in Australia or New Zealand at the time of purchase.

When buying a property in Australia it’s also essential to have your own Tax File Number or TFN in order to link any tax deduction to your personal reference number in the ATO (Australian Tax Office).  Our partners at Taxback.com can help you apply for TFN for FREE and you simply need to register and follow these steps here.

Please also have in mind that to apply for a TFN you need to be present in Australia and it normally takes 28 days for the Tax office to process the application and issue your number. 

The purchasing process in Australia

When you are buying a home in Australia, you should always:

  • Search for a home that matches your criteria of what you want and need
  • Assess how much you are willing to pay for the property
  • Make a proposal to the agent/vendor
  • Apply for a mortgage, if needed
  • Appoint a surveyor – these can help carry out vital checks on the property
  • Pay a deposit – usually 10% – and draw up and sign an agreement
  • Completion – once all paper work and legal documentation has been signed off

With legal fees of 1% to 2% also needed, it’s worth budgeting for 5% to 8% of the property’s purchase price to cover all costs. 

Australia’s Property Taxes

There are numerous different taxes as well as Stamp Duty you should know about before buying Australian property.

Here’s two you should always consider:

Stamp duty: This is essentially tax that gets added to any purchase price. Rates for stamp duty are applied on a scale of 1% to 6.75% – based on the value of property as well as the state the property is located in. This Stamp Duty Calculator can help you figure out the potential amount of tax you will pay on the property.

You may be eligible for a reduction if you are part of the First Home Owners Scheme (see below).

You also need to be in Australia at the time you sign the contract and on settlement day.

Capital Gains Tax: If you don’t own a home in New Zealand, or if you sold it before you moved over the ditch, you don’t need to worry about this. But if you rent out your home in NZ or sell it while you’re in Australia, you will likely need to pay Capital Gains Tax.

It’s a good idea to seek help from a professional accountant to make sure that you are compliant with your property taxes in Australia. 

Will I be affected by Stamp Duty when buying a property in Australia?

That depends. A lot of New Zealanders who enter Australia are on a Special Category Visa (subclass 444).

If you are on this visa then you will not be required to pay Stamp Duty surcharge which is normally required for nearly all territories in Australia.

That is except for New South Wales, where you’ll need to be for at least 200 days before you can avoid this fee.

You’ll also need to be in the country when you sign the contract in order to avoid the stamp duty charge. 

Can I get the First Home Owners Grant in Australia?

Looking to buy your first home in Australia but confused if you can apply for the First Home Owners Grant (FHOG)?

The FHOG was brought in in order to encourage home ownership. New Zealanders are typically considered residents of Australia and as such they may be eligible for the grant.

Can I get a property loan in Australia as a New Zealander?

Yes! However, the amount you can get depends on some personal circumstances.

For example, if you are a New Zealander living in Australia, you can get a loan of up to 95% of the property value.

However, if you are a New Zealander still living in New Zealand but looking to buy an Australian property, you can only get a loan up to 75% of the value.

You can claim the interest that is charged on your home loan as a deduction when you are filing your tax return. This will only be relevant to you if you are using the property to earn income by renting it out.

However, if the property is being used to produce income, you will be able to claim some tax deductions. 

Who can help me filing my property taxes?

It is necessary to keep records for all of the transaction, fees, expenses related to the property – these will help you filing your tax return.

You could always file by yourself. However, this is often seen as tricky, especially if they are new to the process.

That’s why getting a tax agent like Taxback.com to do all the boring paperwork for you makes so much sense!

Get started now!

Still got questions?

If you haven’t already read the below posts you should and/or you can ask questions in the comment section below and we will get back to you:

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