Are you a New Zealander looking to invest in the booming property market of Australia? The good news is that New Zealanders buying property in Australia is not as daunting as it may seem.
With its world-class cities and stunning landscapes, it’s no wonder many New Zealanders are drawn to the idea of owning property across the Tasman Sea. In fact, the process can be quite straightforward, with multiple benefits and resources available to ensure a smooth transaction.
We’ll will walk you through the essential steps of New Zealanders buying property in Australia, from understanding your rights as a citizen to financing options, government regulations, and tax implications, as well as practical tips for property search, legal assistance, and fund transfer.
Read on to discover how you can understand the process of buying property in Australia and turn your dream of owning a piece of the Land Down Under into a reality.
New Zealand Citizens and Australian Property
As a New Zealander, you may be wondering whether you’re eligible to purchase property in Australia. The answer is yes – in fact, New Zealand citizens, as well as foreigners buying property in Australia, are authorised to acquire vacant land and existing properties in Australia.
New Zealanders can enjoy the same privileges as Australian permanent residents. This is largely due to the close relationship between the two countries, with joint agreements in place for trade, residency, and legal purposes.
However, it’s important to note that your eligibility for certain exemptions and benefits may depend on your visa status. While permanent residents are eligible for exemptions when purchasing property in Australia, temporary visa holders face some restrictions and may need to obtain Foreign Investment Review Board (FIRB) approval.
Let’s delve deeper into the benefits and distinctions between permanent residents and temporary visa holders.
Special Category Visa (SCV) Benefits
As a New Zealander living in Australia, you’re likely to hold a Special Category Visa (SCV), which is automatically granted upon your arrival in the country. This visa comes with several advantages in terms of property ownership, as SCV holders possess comparable borrowing privileges as permanent residents of Australia.
Additionally when it comes to New Zealanders buying property in Australia, New Zealanders holding an SCV may be eligible for the First Home Owners Grant (FHOG) and other advantages, depending on their residency status and the state or territory where they’re purchasing property. This makes the process of buying property in Australia even more attractive and accessible for New Zealanders with SCVs.
Permanent Residents vs Temporary Visa Holders
For those on temporary visas, the process of purchasing property in Australia is slightly different. Temporary visa holders are allowed to buy one established dwelling as their main residence, but must obtain FIRB approval to do so. Furthermore, they can only access the First Home Owner Grant or stamp duty discount if they’re buying property jointly with an Australian citizen or permanent resident.
On the other hand, permanent residents are exempt from FIRB approval and eligible for various benefits when purchasing property in Australia. This distinction highlights the importance of understanding your residency status and its implications on your property buying journey.
Financing Your Australian Property Purchase
Securing financing is a crucial step in the process of purchasing property in Australia. As a New Zealander, you have access to a range of financing options, including expat mortgages and leveraging equity from your existing NZ property.
It’s important to research the various loan products available to determine which one best suits your needs and financial situation. Some Australian lenders may even offer preferential terms to New Zealanders due to the close relationship between the two countries.
Let’s explore the financing options in more detail.
Expat Mortgages
Expat mortgages are a type of home loan specifically designed for individuals looking to purchase property in Australia while residing in New Zealand. These mortgages cater to the unique needs of New Zealanders, providing a convenient and accessible solution when you’re trying to buy property in Australia from overseas.
ANZ Bank, for example, offers an expat mortgage plan tailored for Australian expats, and other lenders and mortgage brokers also provide expat mortgages for New Zealanders buying property in Australia. It’s worth shopping around and consulting with a mortgage broker to find the most competitive rates and suitable loan products for your circumstances.
Leveraging Equity from NZ Property
Another option for financing your Australian property purchase is leveraging the equity from your existing property in New Zealand. This involves releasing equity in your NZ property in order to fund the purchase of a property in Australia, effectively employing two separate home loans for the transaction.
This strategy can be particularly beneficial if you have built up substantial equity in your New Zealand property and are looking for a way to invest in the Australian market without having to save for a sizable deposit.
However, it’s important to seek professional advice and carefully consider the potential risks associated with leveraging equity before proceeding with this option.
Government Regulations and Tax Implications
As with any property purchase, it’s essential to understand the government regulations and tax implications associated with buying property in Australia as a New Zealander. While FIRB approval is generally not required for standard residential property purchases, there may be some exceptions for rural or commercial properties.
In addition to FIRB approval, you’ll need to consider taxes such as stamp duty and capital gains tax when budgeting for your property purchase. Let’s take a closer look at these tax implications and how they can affect your property buying journey.
FIRB Approval
Foreign Investment Review Board (FIRB) approval is required for non-resident New Zealand citizens and those holding a Subclass 461 New Zealand Citizen Family Relationship Visa to purchase property in Australia. However, if you hold a Special Category Visa Subclass 444, you don’t need to apply for FIRB approval.
The process of obtaining FIRB approval involves submitting an application, providing supporting documents, and waiting for the board’s assessment and decision. It’s important to factor in this additional step when planning your property purchase timeline, especially if you’re a temporary visa holder or non-resident New Zealander.
Stamp Duty and Exemptions
Stamp duty is a tax levied by the government upon the acquisition of property, and its rate depends on the value of the property and your residency status. New Zealanders holding a Special Category Visa (SCV) and meeting certain requirements are exempt from paying the stamp duty surcharge or Foreign Purchaser Additional Duty (FPAD).
This exemption can result in significant savings for eligible New Zealanders, making the process of purchasing property in Australia even more attractive. It’s crucial to understand your eligibility for stamp duty exemptions and budget accordingly when planning your property purchase.
Capital Gains Tax Considerations
New Zealanders buying property in Australia are subject to capital gains tax (CGT) on taxable Australian property, including real estate and assets employed in the operation of a business in Australia. However, the 50% CGT discount is generally not available to foreign and temporary residents for assets acquired after 8 May 2012.
Understanding the implications of capital gains tax on your Australian property investment is essential, as it can impact your overall return and financial planning. Be sure to familiarize yourself with the relevant CGT rates, exemptions, and offsets when budgeting for your property purchase.
First Home Owners Grant and Other Benefits
As a New Zealander purchasing property in Australia, you may be eligible for the First Home Owners Grant (FHOG) and other benefits. This is because New Zealand citizens are considered permanent residents of Australia, granting them access to various government incentives and assistance programs.
These benefits can provide a significant financial boost, particularly for first-time homebuyers. It’s important to research the specific eligibility criteria and application processes for the First Home Owners Grant and other benefits in the state or territory where you’re purchasing property, as these may vary across Australia.
Property Search Tips for New Zealanders
When searching for the perfect property in Australia, there are several factors to consider. As a New Zealander, you’re eligible to purchase any type of residential dwelling with your loan, although approval may be required for rural or commercial properties.
To streamline your property search, utilize the top real estate websites in Australia and consider subscribing to the Home Price Guide, a database containing monitored sales over the past 12 months within a specified postcode. This will provide valuable insights into local market trends and help you make an informed decision when selecting a property.
Legal Assistance: Conveyancing and Property Law
Navigating the legal landscape of property transactions can be complex, so it’s essential to enlist the help of experienced professionals who can guide you through the process. Conveyancing and property law services are crucial in ensuring a smooth property buying process, as they manage the intricate aspects of purchasing and selling property, such as contract examinations, ordering searches, and title transfers.
Engaging a conveyancer or property lawyer can help you avoid potential pitfalls and legal issues, providing peace of mind as you embark on your property investment journey in Australia. Make sure to research and select a reputable professional who specializes in conveyancing and property law for the best results.
Transferring Funds from New Zealand to Australia
Once you’ve secured financing and found the perfect property, you’ll need to transfer funds from New Zealand to Australia to complete the purchase. The recommended method for transferring funds is to use an online foreign exchange company, which typically offers competitive exchange rates and lower fees compared to traditional banks.
To initiate the transfer, you’ll need the Australian bank account details, including the full name on the account, bank name and branch address, 6-digit BSB number, and 5-9 digit bank account number. By utilizing an online foreign exchange company, you can save money and ensure a smooth, secure transfer of funds for your property purchase.
Tips for a Smooth Property Buying Process
To ensure a seamless property buying experience, it’s important to be well-prepared and organized throughout the process. Having your documents ready, understanding your eligibility criteria, and researching potential lenders can help you avoid delays and complications.
Additionally, take the time to thoroughly research the Australian property market and familiarize yourself with the various government regulations and tax implications associated with buying property as a New Zealander. By being proactive and staying informed, you’ll be well-equipped to navigate the property buying process with confidence and ease.
Summary
In conclusion, purchasing property in Australia as a New Zealander is a feasible and attractive investment opportunity, with numerous benefits and resources available to make the process as smooth as possible. From understanding your rights as a citizen and visa holder to securing financing through expat mortgages or leveraging equity from your NZ property, there are a variety of options to suit your individual needs and circumstances.
It’s essential to stay informed about government regulations, tax implications, and eligibility for grants and benefits, as well as enlisting the help of professional services such as conveyancers and property lawyers. By following the tips and guidance outlined in this comprehensive guide, you’ll be well-equipped to confidently embark on your Australian property investment journey.
So, what are you waiting for? Now is the perfect time to explore the Australian property market and turn your dream of owning a piece of the Land Down Under into a reality. Happy property hunting!
Frequently Asked Questions
Can a NZ citizen buy property in Australia?
Yes, New Zealand citizens are able to purchase property in Australia. As a New Zealander, you may be eligible for the first homeowner’s grant, just like an Australian citizen.
With the right financial information and necessary documentation, you can successfully purchase property in Australia as an NZ citizen.
Do New Zealanders have to pay stamp duty in Australia?
Based on current regulations, New Zealanders purchasing Australian property from outside Australia do not have to pay stamp duty. However, they may need to pay additional foreign duty and loans from Australian lenders are generally not available for investment purposes.1 Consequently, it is important to take into account the associated costs before making any purchase.
Can a Kiwi buy an investment property in Australia?
Yes, a Kiwi can purchase an investment property in Australia. Depending on the property price and the lender’s requirements, you may need to provide a larger deposit or meet other criteria.
Ultimately, it is possible for New Zealand residents to purchase investment properties in Australia.
Can Kiwis get the first home buyers grant in Australia?
Yes, New Zealand (Kiwi) citizens are eligible to receive the Australian Government’s First Home Owners Grant (FHOG), as they are considered permanent residents of Australia.
