Buying property in Australia for holiday purposes

[Dunelm68]

Is it feasible to buy a house (no mortgage required) in Australia as a British citizen to use for 3-6 months per year whilst visiting family who would also use the house for friends and other relatives to use at other times. 

[newjez]

1 hour ago, Dunelm68 said:

Is it feasible to buy a house (no mortgage required) in Australia as a British citizen to use for 3-6 months per year whilst visiting family who would also use the house for friends and other relatives to use at other times. 

You could lend the money to your family and they could buy the house.

I think there are rules on non residents buying property, but I believe they are allowed to buy brand new houses.

Edited November 8, 2019 by newjez

[Marisawright]

As a foreign buyer, you’ll need to apply to FIRB for permission to buy. The fee for that is a few thousand dollars. If you’re not buying it as your principal residence, then there are restrictions on the type of dwelling you can buy. 

You will be charged extra stamp duty, which varies from state to state but can result in you paying as much as three times the normal rate. You may have difficulty getting insurance on the property. 

All in all, it would be much easier if you could lend or gift the money to an Australian resident to buy the place in their name

[rammygirl]

Look at the FIRB rules and specific details of the state.  It is perfectly possible but more expensive as a non resident.

You will not have any specific issues with insurance being a non resident, the issue will be the same as an Australian in that the house may be unoccupied fo weeks on end.

We bought land as non residents through FIRB (it was free then!).  We had to build new, we let that house out whilst we were in the UK.  We now live in it.

I know of people who have done this, sometimes building on family land.  If you do buy land the stamp duty and FIRB fees will only be on that land purchase price not on the value of the build.

I honestly wouldn’t get into having someone else own a house for you........ too many things could happen down the line and you would have to spend money on legal costs to protect your investment somehow anyway. Not when there is a perfectly legal way of doing this.

[Dunelm68]

Thank you all! Useful information to mull over that it is possible to be able to do that and also for insurance purposes as in the U.K. insured properties should not be left empty for prolonged periods arrangements can be made to have somebody there off and on to satisfy the insurance terms.

I do agree that it would be inadvisable to "lend" money to purchase a property (and it would be a new build also - not interested in an established house) as you are quite right you never know what may happen down the line - I would want to be in control

Thank you for your replies!

[Nemesis]

23 minutes ago, cartloot said:

Outsiders can purchase property in Australia, yet there are a few confinements to consider. Non-occupants must get endorsement from the Foreign Investment Review Board (FIRB) before they can purchase a property. As a non-occupant, you can purchase a built up property for yourself as a home yet it must be your main living place.

Please make sure your terminology is correct when giving advice on something so important.

What is an "outsider"? and a "non-occupant"?

Edited December 23, 2019 by Nemesis

[Guest Naval Aulakh]

On 08/11/2019 at 21:22, Dunelm68 said:

Is it feasible to buy a house (no mortgage required) in Australia as a British citizen to use for 3-6 months per year whilst visiting family who would also use the house for friends and other relatives to use at other times. 

Of course, it is feasible. First of all, I would like to ask where do you want to buy property in Australia?  Since I am from cranbourne area, I can tell you about that place very much. Since you mentioned that you need to buy a house for limited time. It's bit complicated process but possible. You can do one thing, approach a real estate agent who would assist you in every aspect in buying process. After spending that time (say 5-6 months) , you can sell your property through that real estate guy. Bit easier for you! 

[Marisawright]

20 minutes ago, Naval Aulakh said:

Of course, it is feasible. First of all, I would like to ask where do you want to buy property in Australia?  Since I am from cranbourne area, I can tell you about that place very much. Since you mentioned that you need to buy a house for limited time. It's bit complicated process but possible. You can do one thing, approach a real estate agent who would assist you in every aspect in buying process. After spending that time (say 5-6 months) , you can sell your property through that real estate guy. Bit easier for you! 

What a silly piece of advice.   Australia has stamp duty.   If you buy a property, there is no way you would make enough capital gain in six months to offset the cost of conveyancing costs and stamp duty

[rammygirl]

42 minutes ago, Naval Aulakh said:

Of course, it is feasible. First of all, I would like to ask where do you want to buy property in Australia?  Since I am from cranbourne area, I can tell you about that place very much. Since you mentioned that you need to buy a house for limited time. It's bit complicated process but possible. You can do one thing, approach a real estate agent who would assist you in every aspect in buying process. After spending that time (say 5-6 months) , you can sell your property through that real estate guy. Bit easier for you! 

Hardly consistent with your other posts on property in Cranbourne!

[Dunelm68]

I am looking at Adelaide where my daughter lives. When I say a limited time I mean I would stay in Australia for 3-6 months (dependent on visa) than return to UK - property could be rented in interim- I would not be looking at selling property within a short period of time - it would be two fold, an investment and also a place where I and other family members could stay without my daughter having to juggle bedrooms etc when visitors descend

[rammygirl]

As before you will need FIRB approval. All the information is on line, as are any additional costs for foreign buyers.  You will be able to let out the house, you will need to declare earnings and do an ATO tax return every year.  It can be done.  It will however need to be a new build or possibly an apartment or development with existing FIRB approval, you cannot buy an established dwelling. 

[Dunelm68]

Thank you - I had since gone onto the website which had the same information- but I guess the “fees” may be quite high but certainly worth thinking about. Thank you for the information - always helpful for for viewpoints which may not have occurred to me. Need to get through this world wide problem first!!

[Marisawright]

2 hours ago, Dunelm68 said:

Thank you - I had since gone onto the website which had the same information- but I guess the “fees” may be quite high but certainly worth thinking about. 

The fee to apply to FIRB is a few thousand dollars which is not too bad.  It's the stamp duty which is the killer.   For instance, for a property worth $500.000, an ordinary South Australian would pay $21,000 in stamp duty.    Because you're a "foreign investor", your stamp duty will be $56,000.

[Dunelm68]

The stamp duty is a killer! I knew it was a sizeable sum - on the plus side there are some reasonable small new builds in the area I am looking at at around $350 so the fees would be smaller . Just out of curiosity which website did you find the figures? Many thanks 

[rammygirl]

If you buy a home and land package the stamp duty is only calculated on the price of the land.

Info is here. https://www.revenuesa.sa.gov.au/taxes-and-duties/stamp-duties/calculators/stamp-duty-on-conveyances-calculator-new  Foreign buyers are charged an extra 7%.

This was not the case when we bought, they have clamped down on foreign ownership in recent years though. 

Edited March 19, 2020 by rammygirl

[Dunelm68]

That website is very useful, thank you! I had not come across that. Quite an involved process so need to work out some sums but could work out to be good concept .

Thank you for taking the time to give me some good info and website connections as it’s a few months since I first posted the question and the world is facing some challenges presently but worth thinking about in the next year or so.