Sorting your Finances in Australia
When planning a move to Australia, finances are a key consideration that will dictate your decisions.
The initial costs of moving to another country and buying property can be large, so it’s important to understand what costs you may be facing, in order to plan accordingly. Taking a look at your current financial position, including your assets, investments and income will help create a clear picture of your budget. Once you have a realistic budget in mind, you can take the next steps to researching and acquiring property.
Taking a look at your current financial position, including your assets, investments and income will help create a clear picture of your budget.
Financing your property
Exploring your options for financing a property are important. If you plan on paying cash for property, by selling or refinancing your UK home, or using money from your investments or bank accounts, you need to be aware of certain implications for non-residents, and foreign investment approval is usually required first.
Financing a mortgage within Australia is another option, and the type of financing will depend on your status in Australia (temporary resident, permanent resident, work Visa etc.). In 2016, Australian banks made it more difficult for foreign investors to obtain mortgage loans; however, qualified foreign buyers are still finding success in their loan applications. Under most circumstances, foreign buyers can borrow up to 80 percent of the property value.
There are further restrictions on foreign buyers purchasing established dwellings, with temporary residents unable to acquire established dwellings. For detailed information on rights and restrictions of foreign buyers in Australia be sure to consult with the Australian Government’s Foreign Investment Review Board website.
Besides the purchase price of a property, there are other costs that need to be worked into the final amount payable. Foreign buyers and temporary residents wishing to acquire real estate in Australia must first submit an application to the Foreign Investment Review Board (FIRB), the cost of this application depends on the purchase price of the property. For a £290,000 property the fee would be around 10 percent.
Other costs buyers may incur include:
– Capital Gains tax (32.5 percent – 47 percent)
– Income tax
– Stamp Duty
– Land Transfer
– Mortgage Registration
The costs involved in buying real estate in Australia vary depending on factors such as state, purchase price, residency status, property type etc. It is best to acquire legal or professional advice to determine the specific purchasing costs that you may be subject to. Ongoing costs such as council rates, utility bills, strata fees (for apartments) and insurances need to be considered when budgeting for a move to Australia.
Exchange rates are another important factor to consider. The smallest fluctuations in currency rates can result in thousands gained or loss when transferring money outside of the UK. Due to the volatility of the currency market, using currency specialists like Smart Currency Exchange can help mitigate the risk of losing money due to fluctuating rates.
The Australia Buying Guide takes you through each stage of the property buying process, with practical recommendations from our experts who have been through the process themselves. The guide will help you to: