How to Buy a House in Australia: A Complete Guide for Kiwis
Kiwis have similar rights to Australians when it comes to buying property in Oz. If you’re thinking about buying a home in Australia, this guide will walk you through the process, the pitfalls and the prerequisites.
One of the bonuses of NZ and Australia being so close is that Kiwis can buy property easily on the other side of the Tasman. A Kiwi can waltz into Australia and buy an urban property without FIRB approval — so what are you waiting for?
Where to find a property in Australia
There are a number of websites, and some specific to the state you’re looking in. The top five largest and Australia-wide online real estate sites in Australia are:
Peruse through them and find one of two sites that you like and find easy to navigate. You can also set up alerts on some of them, to be automatically told when a property that meets your requirements is listed.
How much does a house in Australia cost?
Australian cities can be more expensive than New Zealand. If you look to the suburbs or outskirts of the towns, you’ll find better value housing. However, this may mean access to public transport or desirable schools is further away.
These median house price for various Australian cities as at January 2019.
- Sydney AU$1,144,217
- Melbourne AU$882,082
- Brisbane AU$566,322
- Adelaide AU$534,832
- Perth AU$556,572
- Darwin AU$539,497
- Canberra AU$749,865
- Hobart AU$461,547
Worst case scenario, the town of Andamooka, just 600km north of Adelaide, has an average house price of just AU$34,625. There’s a population of 316 people in the town and an average high of 27°C, with 21 days of rain a year. So if you can’t face forking out a cool million for a Sydney home, you can buy a home in Andamooka and pay it off in two years.
What kind of property should you buy?
What type of property you should buy completely depends on your needs. Whether you want a chic inner-city apartment, a sprawling red brick 4-bedroom home or a compact low maintenance townhouse, it’s up to you. However, if you wish to buy commercial or rural property, this will need Foreign Investment Review Board approval beforehand.
Make sure you do due diligence before investing in any property, but in particular, apartments can lose value quickly. If the area they are in falls out of favour, or a newer apartment with better amenities is built close by, there is the possibility that it will lose value.
As with all property investments, get it checked by a qualified builder, search in the media to see if there are any motorways or shopping centres about to be built in the vicinity, and check the house for bug infestations (this is Australia remember, they have termites).
How to buy a house in Australia
The process to buy a home in Australia is very similar to NZ. You raise the money based on your deposit, attend an auction, and buy a home. Some homes may be sold in other ways, but most are sold by auction these days. These auctions often held at the location in front of the home so you will need someone on the ground if you are not in the country yet.
Getting a mortgage in Australia
In a process similar to New Zealand, you’ll need to apply for a loan from a bank. Have proof of income from payslips and tax returns, and make sure you have a deposit of about ten percent- although some banks may accept as little as five percent.
It’s up to you which bank you apply to, and their rules and rates will differ from one to the next.
Banks in Australia will almost certainly check your New Zealand credit rating. Make sure you contact all the credit rating providers in NZ and check that you’re squeaky clean. If you have outstanding debts or overdue fines, pay them promptly, before you apply for a loan.
Banks may charge you more interest because you are not an Australian citizen, so make sure you shop around to get the best rate,
Can I use my Kiwisaver as a deposit for a home in Australia?
If you are buying your first home, you may be able to use your Kiwisaver as a deposit on the home. You will have to meet the normal rules regarding income levels, length of time in Kiwisaver, and other regulations.
Taxes and duties on houses in Australia
There are a few taxes and stamp duty to think about if you are a Kiwi buying a home in Australia.
Stamp duty: This is an Australian tax that gets added to the purchase price. It’s a percentage of the price you pay, and this percentage does vary from state to state. You can figure out how much stamp duty you need to pay by using this calculator. You may be eligible for a reduction if you are part of the First Home Owners Scheme (see below). Having a SCV exempts a Kiwi from stamp duty in NSW, VIC, QLD, WA, SA, ACT and TAS, but not in every circumstance. For instance, in NSW, you must have been in the country for at least 200 days before buying a home. You also need to be in Australia at the time you sign the contract and on settlement day. Get a great accountant and don’t get caught out in the small print.
Capital Gains Tax: If you don’t own a home in New Zealand, or if you sold it before you moved over the ditch, you don’t need to worry about this. But if you rent out your home in NZ or sell it while you’re in Australia, you will likely be liable for CGT. It’s best to consult an accountant to ensure that you do are compliant with financials in Australia.
Bright line test: In New Zealand, if you have sold a home and have owned it for less than five years or have not used it as your primary family home, you may be liable for the bright-line test. Make sure you check it out before making decisions about renting out your NZ home.
Non-Resident Withholding Tax: If you are living in NZ and paying interest to a lender in Australia, you may have to pay extra tax. If you choose a lender, make sure they meet a set of criteria to ensure you don’t have to pay NRWT.
A buyer advocate- do I need one?
A buyer advocate, if you want a simpler process, can save you time and money (and stress!). This person is a professional who will know the local market and can help you locate appropriate properties and objectively evaluate them. Once you’ve chosen a home, they can help you negotiate to get the best price. They have realistic expectations, and can help to ensure you don’t get caught up in the moment and over-bid.
They are invaluable if you haven’t lived in Australia yet, because they know the area, the suburbs, the schools, and what’s close by. It will save you hours of research.
These buyer advocates ONLY buy properties, not sell them. This way, you know you’re getting advice from someone who has it in their best interests to help you. A buyer advocate might cost about 1.5% of the budget, which is usually a fixed fee agreed on in advance. This might sound like a lot of money but if they save you AU$50,000 and a bunch of stress, it’s worth it.
First Home Owner’s Scheme
You could be eligible for this scheme if the home you are buying or building meets the criteria here. It will depend on the state you live in. This is available to Australian residents and citizens, but also has been extended to New Zealanders living in Australia on the SCV. Generally, you are eligible if:
- You’re a first home buyer.
- You’re buying to live in
- The property is worth less than a certain amount (varies from state to state)
- You’re in the country at the time of settlement and contract exchange
- You must have been living in the country for a length of time (differs among states)
Buying in different states
Each state in Australia has slightly different laws and processes. Once you know where you’re living, check the details of the local regulations.
- The ACT government site has everything you need, from their housing strategy through to how to plan and design your new home build.
New South Wales
- Between the NSW government site and the NSW fair trading site, you’ll have enough information to do everything from assessing the market through to buying the property,
- The local Northern Territory government site has plenty of information about homeowner incentives, how to buy and sell a home, and building and subdividing.
- The QLD local body government site has loads of helpful information on renting and buying. The property regulation page, in particular, has information around the legal side of buying a property in Queensland.
gives a great step-by-step guide as well as lots of helpful information for the first time SA house buyer.
- The Consumer, Building and Occupational Services page on the Tasmania local body government site has information about cooling off periods, if you need to use a conveyancer, and contracts.
has lots of super-user-friendly information for potential Melbourne house buyers. The Consumer Affairs site has more information that goes beyond the basics.
- The WA Government site has a fantastic site with loads of useful information.
Can a Kiwi buy a home in Australia while still in NZ?
Yes. For a lender, selling to a Kiwi in Australia presents much less risk than a borrower living in New Zealand. This may result in a higher interest rate and will depend largely on the lender.
Moving your possessions to Australia
Once you’ve decided you’re moving to Australia, the next decision is a series of small decisions- what will you take with you, and what will you leave in New Zealand? If you decide to move your car, pets, or possessions over, you need to consider timeframes.
For instance, it may be weeks after your arrival before your household goods arrive. Then what happens if your stuff arrives but you haven’t purchased a house yet? Ausmove manage the whole process from packing to delivery at your new home in Australia, and have secure storage units on both sides of the Tasman. They will ship your goods only when you’re ready- or hold them for you in Australia if your plans change.
Should you sell your NZ home before buying in Australia?
The answer to this question is really up to you and your financial situation.
Rent out your NZ home and buy in Australia: This means you’ll have two mortgages to pay and tenants to manage in New Zealand. This may mean you can be charged extra taxes (such as the Bright-Line and Capital Gains Tax) too. However, it does mean you have a property in NZ still which you can return to if required.
Sell your home in NZ and buy in Australia: Possibly the most stressful option initially, the timing to get this all smoothly may be impossible. You may need a temporary rental at one or both ends. However this avoids the capital gains tax and any need for the bright line test- and you’ll only have to pay for one mortgage at a time.
Take your time and do your research first
As each state has slightly different rules, make sure you check with local regulations to ensure you are compliant with all requirements. This will also show up any potential problems with tax or stamp duty that you might wish to avoid.
Hiring a buyer advocate will provide you with invaluable local knowledge, and may help you to make the best decision for your needs. Also consider hiring a lawyer or accountant that understand the laws around New Zealand acquisition of Australian homes- their cost may be repaid in the savings you make in your home.