How to get a loan if you’re a foreign investor

17 Feb How to get a loan if you’re a foreign investor

Due to the heat of the Australian property market, at least in the capital cities anyway, it could be easy to think that you can’t get a loan if you’re a foreign investor. Last year there was a lot of publicity around the fact that banks and other lenders were cracking down on foreign investment. It would be easy to think that all foreign investment loans have been stopped, however under some circumstances you can still obtain a loan, so what do you need in order to qualify for a loan as a foreign investor? That’s where we come in. We’ve done the research and sifted through all the conflicting information and can give you a straight answer on what you need in order to qualify.

Unlike a regular home loan which can be processed in a matter of days, your application will need to go through the FIRB (Foreign Investment Review Board). Fortunately that process isn’t as long as you may think it is and the design could be granted in around 30 days. That’s not too long in the grand scheme of things and is less than the average settlement time of 90 days, so you can get your application approved prior to settlement.

Unlike a standard home loan questions will be asked by the FIRB. They’ll want to know if you’re going to live in the property, or if you’re going to rent it out. Your application is likely to be looked upon favourably if you are likely to live in the property or if you have an interest in Australia, such as someone who will study here or someone purchasing the property for accommodation. Unlike regular property purchases, if you stop residing in Australia, then you will need to sell the property.

If you purchase the property from a developer then you will need to pay all the normal fees that you would if you were an Australian tax resident. That includes the Strata/Boy Corporate fees and other taxes and fees.

The major thing that you’ll need to know is that you cannot rent out the property as an investment property. You do have to use it for your own personal use. It can’t be bought specifically to rent it out.

You’ll also need to consider exactly what a foreign investor is. The term is extremely broad and could potentially include a large percentage of the population.

For example, an Australian citizen living overseas would be considered a foreign investor, despite holding citizenship and despite clearly having ties to Australia. The only difference is that they would not need to seek approval from the FIRB.

Foreigners on permanent visas or special category visas would easily be able to purchase property in Australia, as can foreign nationals who have an Australian spouse or partner.

Generally foreign nationals will be limited in the types of property they can purchase – it would be vacant land, new dwellings or off the plan apartments, however under special circumstances approval will be granted for foreign nationals to purchase existing real estate.

Our team has access to lenders who will grant loans to foreign nationals so if you’d like more information please give the Aspirus team a call or email to find out more.