Can New Zealand Citizens Buy Property in Australia?
Standing between two trans-Tasman neighbours, Australia and New Zealand, there are a few important questions Kiwis have when it comes to property – including whether New Zealand citizens can buy property in Australia.
The answer is yes! But buying property in Australia brings with it both benefits and drawbacks, so the decision should not be made lightly.
Here we will explore the ins and outs of buying a property in Australia as a New Zealand citizen – covering both the benefits and downsides of doing so. So let’s dive in!
Equal Treatment for New Zealanders
Fortunately for New Zealanders, when it comes to buying property in Australia there is no discrimination. All the same restrictions, regulations and laws apply to New Zealanders as they do to AU citizens thinking about buying property – excluding New Zealand citizens from special treatments such as those granted to first home buyers.
Thanks to the Trans-Tasman Travel Arrangements (TTTA) that have been active since 1973, New Zealand citizens have full work rights and access to many benefits such as the right to stay indefinitely in Australia.
Therefore, almost any Kiwi can buy property in Australia – just as long as they meet the usual requirements specified under Australian law such as earning a regular income or having approval for a loan. The knowledge of equal treatment is a great reassurance for anyone hoping to buy a property.
Tax Implications
When it comes to the tax implications of buying a property in Australia, things become a little bit more complicated. Naturally, anyone buying a property in Australia will need to check which taxes they need to pay. This can differ depending on the individual’s personal circumstances, the type of property they purchase and the state or region in which they purchase it.
In most cases, capital gains tax (or CGT) will apply, though New Zealand citizens can apply for the temporary resident CGT exemption.
For example, Kiwis living abroad for two years prior to the sale of a property can be exempt from CGT. This means they won’t have to pay Australian tax on their profits – instead, they will have to confirm that they are exempt to the ATO.
The Choice of Property
When it comes to buying a property in Australia, Kiwis are presented with a variety of options. For starters, anyone from New Zealand can purchase a residential property with a loan from an Australian lender like anyone else.
Likewise, a foreign investor can purchase a new property off-the-plan and benefit from the tax exemption. This is the process of a New Zealand investor purchasing a property before completion so they can benefit from the deductions and exemptions granted during construction.
For New Zealanders who are looking to make an investment rather than a simple purchase, there’s also purchase-to-let. This offers potential landlords the chance to purchase a property then rent it out, and benefit from the rental income. As with residential purchase, a foreign investor can also opt for this option.
Additional Considerations
When considering buying property in Australia, it’s important to be aware of any additional considerations that may arise. This includes the associated fees and taxes that come with the process of buying a property.
These can include stamp duty charges, a conveyancing fee, possible mortgage fees, as well as any extra costs that may come up through the property-buying journey. It’s essential to factor in these fees to ensure you’re budgeting correctly for the purchase of your property.
It’s also important to ensure that your passport is valid throughout the process, and it’s worth considering if you need a visa for an extended stay or for living in Australia. In some cases, additional paperwork may be required, so make sure to be prepared.
Negotiating Prices
For anyone looking to buy a property in Australia, bargaining is an important part of finding the right place at the right price.
When it comes to the Australian property market, real estate agents usually promote the highest price possible. So, it’s important for any New Zealand investor to consider the market deeply and to study the prices of properties in the same area that have recently sold.
Kiwi investors should also look out for the timing of the conditions they are negotiating and ensure that they don’t agree on a surprisingly favorable condition and then discover that other essential conditions have been excluded. It can be a good idea to get some professional advice when it comes to the process of negotiations.
Reaping the Benefits
When it comes to buying property in Australia, it pays to shop around. There are numerous benefits to buying in the Australian market – such as a competitive property market offering good returns, as well as access to Australian dollars while returning Kiwis can drive up the value of their property.
In addition, with Australia’s steady process of immigration, acquiring a property in a desirable location can be a great way to find long-term tenants and monthly income. These long-term tenants will usually be willing to pay more for a reliable property.
Overall, New Zealanders can reap the numerous benefits to owning property in Australia as long as they do research and prepare for potential complications. With the right knowledge, Kiwi investors can gain a secure, long-term investment by owning a property in Australia.
Financing a Property
When it comes to financing a property as a New Zealander, it is possible for foreigners to secure a loan in Australia, though lenders may require additional documents. This is why Kiwi applicants should get in touch with a specialized pre-approval consultant before applying for a loan.
In some cases, the repayment structure of a loan may affect the tax deductions a Kiwi has access to. An experienced pre-approval consultant can ensure the structure is designed to give the best tax advantages when buying property.
Furthermore, a consultant can make sure the loan is managed efficiently while the property is owned and kept up to date. All these measures are important parts of owning property in Australia.
The Prominent Role of Exchange Rates
When buying property in Australia, the role of exchange rates is an essential part of the process. Whenever New Zealanders exchange money, they will have to pay some transfer or conversion fees depending on the type of currency being exchanged.
This means that in times of high rates, it can be difficult to reap the full potential benefits from the purchase. Conversely, in times of low rates, Kiwis can have a greater advantage when buying property in Australia.
Having said that, many of the large New Zealand banks have a representation in Australia, so it may be easier to use the same bank for the loan and for the money exchange process. That said, all money exchanges are impacted by the exchange rate, so it’s important to think about the tax implications that can occur.
Familiarizing Yourself with Australian Laws
When buying a property in Australia as a New Zealander, it’s important to be aware of the important laws and regulations that govern the process. In Australia, buyers need to fulfil various legal papers in the same way as any other investor. Whether you’re looking to own multiple properties at once or you’re interested in one unit, doing your homework is important.
This is why it’s essential that Kiwi investors use the services of local professionals, familiarise themselves with the local rental rules and regulations, and look up the local council’s rules when it comes to additional costs and taxes when buying or renting a property. All these are done to ensure that the purchase process is handled in an responsible and accurate manner.
Investment Potential and Risks
When buying a property in Australia, it’s important to understand both the potential and risks associated with the purchase. On the one hand, if handled correctly, owning a property in Australia can be a great source of income for any New Zealander. This can come in the form of monthly tenants providing a reliable income, or the capital appreciation of such a property.
On the downside, challenges can become all too evident if investors don’t do research or look at pricing trends before purchasing. An inappropriate choice of property can prove detrimental, as can the lack of understanding of the legal documents and rules involved.
It’s also worth noting that in some cases, it can be difficult for a investor to find a reliable and informed real estate agent, especially if they are not permanent citizens of Australia. This is why being aware of the laws and regulations can prove useful to any foreigner who wishes to purchase a property.
Ensuring a Profitable Transaction
The key to successful property transactions in Australia for New Zealand citizens is to be familiar with the local market and seek advice from certified professionals, such as pre-approval consultants, real estate agents in Australia, and so on.
Doing sufficient research and familiarising yourself with the available options before entering into any agreements is also important, as is creating a budget which considersall potential costs, fees, taxes, deductions and transfer fees.
By doing all of the above, Kiwis can ensure that their purchase in Australia is profitable – and make the most out of their investments.
