Non-Resident loans

What properties can foreign nationals buy?

Residential Real Estate

• Under Australia’s foreign investment framework, foreigners generally need to apply for foreign investment approval before purchasing residential real estate in Australia.
• New dwellings – Applications to purchase new dwellings are usually approved without conditions. Applications to purchase vacant land are normally approved subject to construction being completed within four years (to prevent land banking). Once new dwellings are built or purchased, they may be rented out, sold, or retained for the foreign investor’s own use.
• Established dwellings – Non-resident foreign persons are generally prohibited from purchasing established dwellings in Australia. However, temporary residents can apply to purchase one established dwelling to use as a residence while they live in Australia. The purchase of an established dwelling in these circumstances would normally be conditional on the foreigners selling the property when they leave Australia, or their temporary residency expires and do not become a permanent resident or an Australian citizen. Temporary residents cannot acquire established dwellings to rent out or for use as a holiday home.

Commercial real Estate.

• Acceptable Security Residential (including single build construction) and Commercial property.

Key notes regarding Residential and commercial properties.

• Residential properties the vendor pays the council rates, property tax, water and sewage. Tenants’ rights; The right to live in a property that is safe and in good order repair, the vendor must pay for the repairs on the property the tenants are protected by various government state laws.
• Commercial properties, the general rule the tenant pay for all property outgoings. E.g. property tax and council rates, water and sewage cost. The tenant must leave the property is in good order after expiry of lease. The lease is a commercial contract and therefore commercial agreement between to parties and the tenant is not protect by any state laws.

Return on investment.

• Residential property have lower return on an investment, but can have a greater property value growth
• Commercial property have higher return on an investment, but commercial property value growth can be lower to residential.

Maximum LVR to Maximum loan amounts

75% up to $5.0m

70% up to $25m

(High Rise or Inner-City Apartment 60%) (Commercial 75%)

Loan term up to 30 years

 

Key notes;

• A loan for International borrowers looking to invest in Australian real-estate must have Foreign Investment Review Board approval (“FIRB”).
• Repayment Type Principal & Interest only
• Additional Requirements • FIRB Approval is required.
• Evidence of deposit held in an Australian bank
• Appointment of an agent (not broker)
• Satisfactory Customer Identification Check
• If refinancing, 6 months recent statements
• Copy of their credit report from their country
• Evidence of funds to complete transaction held in an Australian bank in the name of applicant.

Serviceability Evidence of serviceability will be provided by obtaining a combination of the following:

PAYG

• 3 latest payslips translated into English by NAATI*
• 3 months bank statements translated into English by NAATI*
• Employment letter translated into English by NAATI*
• XE currency conversion to be completed and provided with submission

Self employed

• 2 years financials translated into English by NAATI* and
• 6 months statements showing business income to be translated into English by NAATI*
• XE currency conversion to be completed and provided with submission

* Please note all income documents provided to La Trobe Financial are to be translated into English by NAATI

(National Accreditation Authority for Translators and Interpreters).

Serviceability calculation method: 90% of foreign income used for serviceability calculation as well as Net Surplus

Income Calculator. 2% sensitivity buffer applied to applicable interest rate.

 

Any further questions please email simon.bowler@mortgagechoice.com.au or call on 0418 604 910