How should overseas buyer choose to invest Property in Australia?

How should overseas people choose to invest in real estate in Australia? This is a headache for many friends who want to understand Australian investment but lack experience. Today's article will answer the questions that overseas buyers will face one by one according to the various aspects that overseas buyers will face when buying a house.

This kind of buyer refers to a friend who is not in Australia and does not have any form of valid Australian visa.

If you have a valid visa in Australia, but the visa time limit is less than 12 months, such as a tourist visa, or a family visit visa within one year, it will also be regarded as a pure overseas person.

According to relevant laws and regulations in Australia, pure overseas people can only buy new houses, not second-hand houses.

In Australia, a new house refers to a house that has been built, is under construction or will be built on residential land (such as off-the-plan, Off-the-Plan), and has never been traded before, or the house has been used, but accumulated It can also be considered a new home if it is not more than 12 months old.

In addition, second-hand houses that have been renovated or renovated cannot be regarded as new houses. Unless the second-hand houses on the land are demolished, the newly built residential projects increase the number of houses on the land. If this condition is met, in principle, pure overseas buyers can invest in this type of real estate project.

In terms of land, pure overseas buyers can only buy vacant land, that is, land that has never been developed before. If the land has been built and then demolished, it will not be regarded as vacant land (unless new projects increase the number of listings) . Pure overseas buyers need to start construction within 24 months of purchasing the vacant land and complete it within 4 years.

If the buyer holds a valid visa for more than one year, such as a student visa, a temporary resident visa (TR), a temporary skills shortage visa (subclass 482), a business innovation and investment visa (subclass 888 or 188), etc., and living in Australia, Have submitted a PR application and hold a bridging visa.

In the above situation, it is possible to buy a second-hand house, but only one set can be purchased, and it must be used for self-occupation (no room can be used for rent). If the visa is about to expire and you decide to leave Australia later, the Australian government will It is stipulated that the house must be sold three months before the visa expires.

When you understand what type of real estate you want to invest in and decide to enter the subsequent purchase process, in some specific links, overseas buyers will face corresponding taxes and fees. We have explained to you in the previous article that overseas buyers purchase cost

Based on factors such as cost performance and policy, overseas buyers are usually recommended to give priority to apartment projects in Canberra.

This is mainly considered from the following three points:

First, Canberra currently has a total population of 470,000. The relatively small population base makes Canberra's housing prices more affordable than other cities. Even with the increase in loan interest rates today, lower housing prices make Canberra's housing pressure lower than most cities.

Second, Canberra will not impose additional overseas stamp duty on overseas buyers. Overseas buyers enjoy the same stamp duty ratio as local buyers in Canberra, which greatly reduces the entry threshold and makes it easier for overseas buyers to accept.

Third, Canberra has the highest rental returns in the country. Since 42% of Canberra's working population are government workers of the Australian federal government and municipal governments, as well as staff and family members of embassies and multinational group headquarters in the capital, they flock to International students, etc., Canberra has a very high proportion of the renting population, which also creates the most expensive average rent in Canberra.

Low house prices, low loan amounts and good rental returns make Canberra the most ideal and least risky type of investment for overseas buyers considering an apartment investment.

I believe that many friends will first consider investing in land and villas when they consider investing in Australia. The new house, land and villas that overseas buyers can buy are divided into one contract and two contracts. The situation faced by them And the cost analysis is as follows:

/As one contract/

When a piece of land has been registered with the relevant authorities, and when the buyer has decided to buy the land, there is already a villa under construction on the land, or the construction has already been completed. In this way, when the buyer signs the contract, the land and the villa will be bound into a contract, and the contract price on this contract will also be recorded as the total price of the land price and the house cost.

When overseas buyers buy new houses, they need to pay 12% stamp duty (4% stamp duty + 8% overseas additional stamp duty). .

For example, if Big A purchased a land villa with a contract in Sydney (the land price is $370,000, the house cost is $430,000, a total of $800,000), then its stamp duty calculation is $800,000 X 12% = $96,000.

/As two contracts/

Different from a contract, when the buyer is considering and buying a piece of land, the land has not been registered with the relevant departments, and the subsequent process of building a house must be registered in the land before it can continue. At this time, the land and the house, It will be divided into two contracts, and the 12% stamp duty that overseas buyers will face at this time will only be calculated based on the price of the land. There is no stamp duty for villas, which greatly reduces the cost of buying a house. Therefore, from the comprehensive cost-effectiveness point of view, it is more beneficial for overseas buyers to choose the land and villa items of two contracts.

Taking the same example as before, Big A purchased the land for $370,000 and the building for $430,000, but it is two contracts, so the actual Big A only needs to pay stamp duty based on the land price, that is: $370,000 X 12%= $44,400 for the same land, saving $51,600 over one contract.

If you are an office worker or student with a student visa and temporary work visa, and you need to save time, buy an apartment near the company and live comfortably. If you have a lot of families, you need a spacious place to raise your children. If it is big, then find a detached villa with a larger land.

Apartments are more suitable for office workers, young people who have just entered the society, young couples without children, high-income people who need tax deductions or investors who focus on cash flow and do not value capital appreciation

In short, shopping is convenient, transportation is convenient, and you like it, you don't have to mind whether it is an apartment or a house, provided your budget is sufficient.

There are different things to consider when investing. The ideas are as follows:

First, consider your own budget, that is, how much money you have, not only cash, but also bank loans. At the same time, you need to deduct the cost of purchase, such as stamp duty, etc., how much money you have to do as many things as you can, beyond your budget It's useless to look at the house, after all, you can't buy it.

There are different things to consider when investing. The ideas are as follows:

Second, consider your investment goals. If you are an overseas buyer who wants to invest in Australia, but you find that it takes a long time for the capital appreciation of the house, you don't want to wait, and you want to see the return on investment as soon as possible, then find a rental Apartments with better returns can be rented.

But if you are in the early stage of investment and need to quickly expand your investment portfolio, quickly appreciate and cash out, and then buy a house, then a villa is the most suitable choice.

Third, calculate the rate of return on investment and capital appreciation. After quantitative analysis, the purchase cost and holding cost, plus cash flow analysis, and after comprehensive consideration, calculate which house is most suitable for you.

In terms of capital appreciation, detached villas are the highest, followed by townhouses and apartments, but in terms of rent-to-sale ratios, apartments are the highest, followed by townhouses and villas.

Fourth, you need to consider the housing prices and history of the target area. When buying a house, check the history of housing prices in the past 10 to 20 years. If a certain type of property in a certain area continues to rise after several rounds of housing market cycles, And if the annualized rate of return is good, in fact, whether it is rising or falling, you can buy it and hold it for a long time.

The fifth is to look at the long-term development. If you buy in a development zone, the future development factors are very important. Whether there will be a new airport, railway station, shopping center, or whether it will be an employment center in the future must be considered.

If you buy in an old area, you must pay attention to whether there is an old city renovation plan. If there is, it is basically guaranteed that the value-added will exceed the market.

However, if the terminal products of the old city renovation are apartments, the initial value increase may be relatively fast. When the number of completed apartments is too large, the capital appreciation will slow down. At this time, you can cash out in time and find a better investment target.

Generally speaking, high-end and scarce apartments are suitable for big bosses with abundant investment resources. When buying, you need to pay attention to check the fireproof coating, whether there is a lawsuit with the builder, and whether there are any strange restrictions in strata by law, it is recommended to live by yourself The ratio is above 50%.

Townhouses are more suitable for people who have a little money, but not enough to buy a villa in one step. The family has a large population, the owner needs to go to work, and does not want to spend too much time cleaning the house.

If you are an investor who prefers a balance between the rent-to-sale ratio and capital appreciation, in addition to paying attention to all the problems of the apartment when purchasing, you should also pay attention to whether it is far away from local transportation, employment and shopping centers, if it is too far away , both in rent and capital appreciation will be greatly discounted

Independent villas are more suitable for large families to buy, and investment is more suitable for people who value capital appreciation and have strong earning ability at the same time, because holding independent villas requires relatively greater maintenance costs and cash flow.