Australia is an amazing place to buy land and property, regardless of whether you are a born and bred local or a non-resident looking to take up down under. However, you may be wondering if foreigners, non-residents, and temporary residents are even allowed to own land in the country.
Yes, foreigners can purchase land in Western Australia. Foreigners have the legal ability to purchase land and develop homes on them around the state, as long as it’s approved by the Foreign Investment Review Board.
If you’re interested in property development in Western Australia, this article will cover the basics on legally buying and owning land. We have answered some of the most common questions regarding owning land, commercial properties, paying stamp duty and applying for a home loan in Western Australia as a foreigner.
Read on to learn more.
Can Foreigners Own Land in Australia?
Yes, foreigners can own land in Australia, so long as the foreigners can satisfy or comply with the rules laid out by the Foreign Investment Review Board (FIRB).
Australia is an excellent country for foreigners to purchase land and build a new home, which is why we see tens of thousands of people apply to buy property in our country every year. A beautiful country with a rich cultural mix and a relatively stable housing market are just some reasons people worldwide want to call Australia home.
The Foreign Investment Review Board is Australia’s authority on non-resident property purchases, tasked with advising the government on foreign investment policy. Foreigners who plan to purchase a block of land, an apartment, or a residential property have to abide by the requirements set by the board.
For the purpose of this article, the FIRB defines a temporary resident as an individual who:
- Holds a temporary visa that permits them to remain in Australia for a continuous period of more than 12 months (regardless of how long remains on the visa); or
- Currently resides in Australia, has applied for a permanent visa and holds a bridging visa that permits them to stay in the country until the application has been finalised.
Can Foreigners Buy Vacant Land in Western Australia?
Yes, foreigners can buy vacant land in Western Australia, as long as it is for the purpose of being developed. The purchase of vacant land by non-residents requires approval from the FIRB and for them to meet specific conditions around the development of the land.
Any vacant land purchased by a foreigner has to have the building finished within four years. The FIRB will also seek proof that the dwelling has been completed, and evidence must be submitted to the Government within 30 days.
As part of FIRB regulation, any home built on vacant land purchased in Australia must be lived in by the resident and cannot be rented. If the home is no longer their sole place of residence, they are required to sell it within a three-month window.
Building a home and a life in a foreign country can be difficult and stressful. Thankfully there are expert custom home builders with years of experience building homes for immigrants and overseas investors. While it can be a challenging process, building a house in Australia is a rewarding experience with the right help.
Do Foreigners Pay Stamp Duty in Western Australia?
Yes. Under the Duties Act, foreigners are liable to pay the landholder duty imposed on certain acquisitions as an ‘acquirer’ or a related person to the acquirer.
Paying stamp duty in Western Australia is a fairly standard practice that allows our state to continue to grow economically. The low stamp duty rates in the state are considered very affordable for the low cost of living and high quality of life people in Western Australia experience.
An additional duty is calculated at a rate of 7% for foreign buyers. This is based on the value of the residential property and associated chattels under the ownership of the landholder and the extent of the interest acquired by the foreign person or a person related to a foreigner.
Foreigners acquiring an interest in land or a landholder in WA must complete Form FDA46 or the Foreign Landholder Duty Declaration.
How Much Stamp Duty Will I Pay in Western Australia As A Foreigner?
Western Australia imposes a 7% stamp duty on top of the dutiable value for foreigners’ contracts signed after 01 January 2019. The additional stamp duty for purchasing a property as a foreigner depends on the property’s value.
For example, a first-time non-resident purchaser who plans to buy a property worth $350,000 as their principal residence will pay a stamp duty worth $24,500. The stamp duty for similarly priced properties bought by foreigners who are not first-time buyers will pay a higher rate of $35,235.
Can Foreigners Buy Farmland in Australia?
Yes, a foreigner can buy farmland in Australia but may have to notify the FIRB. The foreigner has to receive a ‘no objection notification’ before they can proceed with a purchase.
If a non-resident decides to buy farmland, the FIRB will consider the value of the agricultural land they own and include it in their threshold. Temporary residents and foreign investors have to notify the FIRB when their $15 million threshold is reached or exceeded. This threshold is cumulative, meaning purchases below $15 million will not require approval.
The land will be classified as ‘agricultural land’ if it can be reasonably used for primary business. Primary business refers to land that can support the following activities; growing plants and vegetables, breeding and selling animals for commercial purposes, tree felling and processing, and dairy farming.
Can Foreigners Buy Commercial Properties in Australia?
Yes, foreigners can buy commercial property in Australia but may need to seek approval from the FIRB. The board will consider the type of property, if the purchaser is a private or government representative, if the purchaser is from a FTA partner country and the property’s value.
Commercial property purchases valued between $0 to $1154 million will need approval from the FIRB first.
Private investors from countries such as Canada, China and Japan will enjoy the increased threshold of $1154 million as FTA partners of Australia. On the other hand, private investors from countries not considered FTA partners of Australia will have to apply for a FIRB approval for properties valued up to $260 million.
Commercial properties in Australia are subject to several taxes: Stamp Duty, Capital Gains Tax (CGT), and Goods and Services Tax (GST).
Can A Foreigner Get A Home Loan In Australia?
Yes, foreigners can get a home loan in Australia, but only some banks are willing to provide loans due to the complexity and risk. Non-residents can borrow up to 70% of the purchase price of a new property in Australia, with interest rates ranging from 6.5% to 8%.
Foreigners are given an interest rate below 5% and can borrow up to 55% if they have a high net worth and earn a ‘primary currency’. Investing in Australian housing is an excellent idea, which is why more and more people are looking to our country to live or invest in.
Australian banks and lending institutions only consider certain countries acceptable for home loan applications. This is because some countries have complex tax legislations that make investing in Australia unfeasible. It is recommended that foreigners consult with their accountant and financial planner before applying for an Australian mortgage.
Can You Buy Property In Australia If You Are A Temporary Resident?
For a temporary resident to purchase property in Australia, you must go to the FIRB for approval. The FIRB has clear guidelines and application processes for temporary residents wanting to purchase properties in Australia.
Can A Foreigner Buy A Business In Australia?
Yes, foreigners and non-residents can buy a business in Australia. The Australian government considers foreign business owners a great way to increase the country’s economy and economic growth.
The Foreign Acquisitions and Takeovers Act 1975 outlines the rules and regulations for a foreign business owner purchasing a business in Australia.
Developing a Property in Western Australia?
If you need an experienced builder for property development in Perth or surrounds, reach out to Central Avenue Homes. Our experience in Perth property development means we can make the process smooth and hassle-free, including for overseas investors.
Our custom design process means we can work to your specifications, time frame and budget on a range of property development projects. Using lightweight FastBuild constructions, we can even deliver multi-storey homes in a quick and cost-effective manner. We also specialise in demolish and build projects and other more challenging builds.
Read more about:
- Custom property developments in Perth
- Lightweight double-storey home construction
- Custom designed new homes
Alternatively, get in touch with Central Avenue Homes to discuss your upcoming development.
This article is published in good faith and for general informational purposes only. It does not take into consideration your individual circumstances and does not constitute an estimate for any specific project. Central Avenue Homes does not make any warranties about the ongoing completeness, reliability and accuracy of this information. Construction costs and other financial details vary and you should always seek a specific quote.