Buying property NSW on provisional 491 visa

[Dean0703]

We may have to come out on the 491 visa for a couple of reasons. Shant bore you! 
This visa once you’ve satisfied the terms for 3 years allows you to become permanent under another visa code that is only for holders of the 491 visa. 

Question is - I think you can buy a house on a provisional visa, however, how easy is this in reality? 
 

If anyone has any knowledge I’d appreciate it. I have no desire to rent long term. 
 

[Marisawright]

The 491 is a new visa so I'm not quite sure if this applies - but if you are on a temporary/provisional visa, it's expensive to buy a property. 

First, you will  have to apply to the FIRB for permission (the fee is a few thousand dollars).   It's not difficult though, just a matter of the extra cost.

Then when you purchase the house, you'll pay more than three times the usual amount of stamp duty.   For instance, on a $500,000 property, the usual stamp duty is $17,500.  You'll pay nearly $60,000.

https://stampduty.calculatorsaustralia.com.au/

 

[Dean0703]

I found the list of FIRB fees which I thought were steep. However, in regard to stamp duty, is there not an exemption if it's your first property purchase a single long as the value doesn't exceed $800,000.

[Dean0703]

I found the list of FIRB fees which I thought were steep. However, in regard to stamp duty, is there not an exemption if it's your first property purchase a single long as the value doesn't exceed $800,000.

I am probably wrong in the case of the provisional visa. What a joke! 

[Skani]

38 minutes ago, Dean0703 said:

 However, in regard to stamp duty, is there not an exemption if it's your first property purchase a single long as the value doesn't exceed $800,000.

Are you thinking of the  First Home Owners Grant?    Eligibility for this requires at least one of the applicants  to be a permanent resident or Australian citizen.

[Dean0703]

Who knows what it is! But probably is this FHOG. 

The way Aussie migration is going, everyone who wants to be permanent I reckon is going to have to come in as a temporary resident before gaining their permanent wings.

It'll be a calculator event of renting v buying if I ever get in. Renting is throwing about $70,000 under a bus for 3 years. Stamp duty and FIRB fees are just throwing the same under a bus although all in one go rather than monthly.

[Marisawright]

12 minutes ago, Dean0703 said:

 

It'll be a calculator event of renting v buying if I ever get in. Renting is throwing about $70,000 under a bus for 3 years. Stamp duty and FIRB fees are just throwing the same under a bus although all in one go rather than monthly.

Renting is not throwing money under a bus compared to buying, when you take into account costs of owning like maintenance, rates and mortgage costs.  

My ex was an accountant and he always said, never buy a house unless you’re cast-iron sure you’re going to live in it for more than five years, and preferably ten. If you sell before that, you would’ve been better off renting than buying, even when the market is rising 

[Dean0703]

I've never rented so it's  an alien concept, but if I had to come over on a provisional I wouldn't sell my house here. 

Lets hope I've got the $1,000,000 or whatever the monetary demand is for a 491 when they publish it!

[Marisawright]

1 hour ago, Dean0703 said:

I've never rented so it's  an alien concept, but if I had to come over on a provisional I wouldn't sell my house here. 

It was a revelation to me when my ex showed me the spreadsheets.   There's so much you don't think about when you own a home.

For instance, when you have a mortgage, the first few years' payments are virtually ALL interest - you're not paying off the principal at all.  So if you sell within the first five years, you've paid the bank thousands in mortgage payments, but you still owe almost as much as you borrowed.    Then there's council rates and strata fees (or maintenance on your home) - neither of which you have to pay if you're renting.  In some states, renters don't pay full water rates either. 

On top of that, you've paid solicitor's fees and stamp duty when you buy, and the real estate agent's commission and solicitor fees when you sell. 

All in all, renting works out cheaper than buying unless you're able to keep the property long enough to make a big capital gain.  

 

Edited December 4, 2019 by Marisawright

[Marisawright]

What am I missing?  why would you need a million bucks to get a 491 visa?

[Dean0703]

I’m exaggerating on the $1m but I did read something, think it was for Victoria that you had to have $40,000 for the 489 to show self sufficiency for a period but that went up depending on how many were in the party.

I get there are swings and roundabouts to buying and renting. However, I’d always want to own. If I want to paint a wall, or knock one down, or put a pool in a property then I want it to be mine so that I can just do it. Rental doesn’t ever give you a slate to do whatever you want on it to the place you call home. 
 

However, it’s each to their own. 
 

With my trusty pen, paper and calculator I’ve worked out if I don’t sell my house in the UK but rent it out, and rent on a 491 for 3 years it’ll cost me not a lot and nothing like paying the buyer premium. 
 

It’s something I could stomach for the greater good. But I’d be buying after that. 
 

And funny, my degree is accountancy and I teach it every day now for a living - I’d still always say buy over rent. In my opinion with rent all you’re doing is paying for someone else to have a capital gain for relatively nothing. At least with UK taxation and rental procedures. 

[Marisawright]

31 minutes ago, Dean0703 said:

I’m exaggerating on the $1m but I did read something, think it was for Victoria that you had to have $40,000 for the 489 to show self sufficiency for a period but that went up depending on how many were in the party

I didn't know that, but $40,000 doesn't sound unreasonable, considering the costs of getting set up when you arrive, and the need to survive until you find work (which can be several months outside the major cities, depending on your occupation). 

I think you'd be much wiser to rent.  Apart from anything else, you might find you hate the place, and then you'll have to sell your home at a massive loss.   Right now, you may be absolutely positive you're going to love it - but let's face it, that's what every new migrant thinks (otherwise they wouldn't persevere through all the visa hoops) - and yet large numbers end up going home.  Australia is a foreign country that just happens to speak English, and there's no way to tell if you'll settle until you get here. 

I understand the emotional side of home ownership.   But as you've just worked out - for those who aren't worried about the emotional side - renting and having an investment property can be just as profitable if not more.  Just be sure you're across the taxation implications, it may be worth getting a depreciation report on your British property before you leave as it will reduce your Australian tax.

 

Edited December 4, 2019 by Marisawright

[Dean0703]

I had my house valued a fortnight ago it’s gone up £35,000 in a year. New windows and a drive make all the difference! 
 

Wait til this general election is by with and Brexit then we shall see.