Can Expats Buy Property in Australia Without Returning?

If you are an Australian living in London, Dubai, New York, or Singapore, you are likely in a strong financial position. You might be earning a higher salary than you would back home, often in a stronger currency. Naturally, you want to put that money to work.

For many expats, the goal is to buy a future home to return to or an investment property that keeps a foothold in the Australian market. But the logistics can feel overwhelming. Do you need to fly back to sign papers? Will the banks lend to you? Do you need government approval?

The good news is that thousands of Australians buy property remotely every year. You absolutely do not need to book a flight to secure a property. However, the rules for "Expat Borrowers" are different from standard borrowers, and getting them wrong can be expensive.

The "Foreign Citizen" Myth

Let’s clear up the biggest confusion first. If you are an Australian Citizen living abroad, you are not considered a "foreign investor" by the Foreign Investment Review Board (FIRB).

You do not need to pay the heavy application fees that foreign nationals pay, and you are not restricted to buying brand-new builds. You have the same right to buy established houses and apartments as anyone living in Sydney or Melbourne.

Getting the Loan Approved

This is where things get technical. While you can certainly get a mortgage, Australian banks will view your foreign income differently than local income.

Banks apply a policy called "shading" to foreign wages to protect themselves against currency fluctuations.

Typically, they will only use 60% to 80% of your actual income when calculating your borrowing power.

If you earn £100,000 in London, the bank might only assess you on the equivalent of £80,000. They may also exclude bonuses or commissions entirely if they aren't consistent.

Additionally, most lenders cap the Loan-to-Value Ratio (LVR) for expats at 80%. This means you usually need a 20% deposit plus costs (stamp duty and legals) ready to go.

The Logistics: Signing Without Flying

Gone are the days of mailing paper contracts back and forth for weeks. The entire process can now be handled remotely, provided you follow the right verification steps.

• Verification of Identity (VOI): You can often verify your identity via a smartphone app (like IDyou) or by visiting an Australian Consulate or Embassy in your host country.

• Digital Signing: Most contracts of sale in Victoria and NSW can now be signed via DocuSign.

• Power of Attorney (POA): If you want complete peace of mind, you can appoint a trusted family member or solicitor in Australia as your Power of Attorney. They can sign legal documents on your behalf, ensuring you don't miss a deadline due to time zones.

Tax Traps to Watch

While you can buy like a local, you are taxed like a non-resident.

No Tax-Free Threshold: Non-residents for tax purposes do not get the $18,200 tax-free threshold. You will pay tax on every dollar of rental profit from day one (usually starting at 32.5%).

Capital Gains Tax (CGT): The biggest change for expats occurred in 2020. If you are a foreign resident for tax purposes when you sell your property, you generally cannot claim the Main Residence Exemption, even if you lived in the home previously. This is a complex area, so getting specific advice from an expat tax specialist is non-negotiable.

Overcoming the "Distance" Risk

The biggest risk for expats isn't the finance; it's buying a "lemon" because you couldn't inspect it yourself. Photos on real estate listings are designed to sell, not to show you the cracking cornice or the noisy road behind the fence.

To mitigate this, you have two options:

1. Trusted Family: Have a family member inspect the property and video call you from the site.

2. Buyer’s Agent: Engage a professional who represents you, not the seller. They can provide unbiased videos, check the neighbourhood, and negotiate the price while you sleep.

The Verdict

Buying Australian property while living overseas is a brilliant way to hedge your currency risk and prepare for your eventual return. The market waits for no one, and securing a quality asset now can save you hundreds of thousands of dollars compared to trying to buy in 5 years when you move home.

Keen to understand how this applies to your situation? We’ll help you break it down and plan the next step.

Disclaimer:

The information in this article is general in nature and does not take into account your personal financial, legal, or tax circumstances. Property structures, tax regulations, and superannuation rules may change over time. You should seek advice from a qualified professional and refer to the latest ATO and government guidelines before making any investment or structuring decisions.