What to know about buying property in Australia as a foreigner

Real estate investors often leave their own backyards in order to find a property that rounds out their portfolio. More and more foreigners are attracted to the real estate market in Australia, for a good reason. According to Urban Developer, $16.6 billion was invested by foreign investors in offices, retail spaces and hotels in 2021. Foreign real estate investors are taking a serious interest in spending their money, something that keeps the industry competitive. Let's take a look at some of the most important things to know when it comes to investing in Australian real estate as a foreigner.

Legal considerations

Before you get started, it's important to make sure that you proceed legally so that the process isn't halted belatedly. The first thing you need to do is make sure that you get government approval. Do this by submitting an application to the Foreign Investment Review Board (FIRB). The FIRB is an organisation that is operated by the Australian Taxation Office and manages the taxes associated with investments or foreigners who want to buy an asset in the country.

After you get approved by FIRB, it's important to be transparent about what the property will be used for. Be aware that the government requires investment properties to either be a new property or a piece of vacant land, where you will build a new property. If you want to buy an already established property as an investment, you will need to live there first.

Fees to be aware of

When you apply for a foreign property investment, note that the FIRB requires a fee to do so. The application fee depends on the value of the property and other investment factors. In general, the fee may change depending on current federal regulations, but you can get a good idea of what your fee will be by checking out the guidance provided by FIRB.

In addition, know that you will have to pay a Foreign Citizen Stamp Duty, which will be charged during the real estate buying process. The only exception for foreigners is if you hold a partner (provisional) visa (subclass 309 or 820). In the case of most properties, your stamp fee will typically range between 4% to 5% of your property's value.

What kind of property to invest in

There are many options to pick from when it comes to investing in Australian property. Determine your goals and then work from there. Note things like location, rental prices and overall resale value. If you aren't sure where to start, working with real estate professionals can help with the process. The experts at Ray White Surfers Paradise can guide you in the right direction, and answer any questions you have along the way.