A Guide To The Perth Property Market For Overseas Investors

Investing in real estate in Perth can be a very attractive prospect for many overseas investors. Even though it is more than possible for non-permanent residents to buy property in Australia, it is important to understand the specific requirements, rules and limitations in place. In KDD Conveyancing’s helpful guide, we explain the processes of foreign property ownership in Perth.

Our general advice is based on our 27 years of experience with the Perth property market, and we recommend speaking to a lawyer if you have legal questions.

Can Overseas Investors Buy Property In Australia?

Yes, non-permanent residents and overseas investors can buy property in Australia.

Non-permanent residents may be able to purchase all types of property, including:

• Vacant land, additionally, when there is an intention to develop it
• Established or second-hand properties
• New off-the-plan properties, including apartments and houses, which have not been

previously occupied. These are often known as new dwellings. (Developers may apply for foreign purchase exemptions up to $3 million on off-the-plan builds; alternatively, foreign buyers will need FIRB approval.)

For each property type, there are specific criteria that need to be met, including how the purchaser intends to use the property. Non-permanent residents will need to be approved by the ATO.  The Foreign Investment website contains more information.

The ATO is the government body responsible for all foreign investment in residential property in Australia. Formerly, this was managed by the Foreign Investment Review Board (FIRB); however, today, they are an advisory body only.

How Do Overseas Investors Apply For Approval To Buy Property?

The application process for overseas investors wanting to buy property will follow the steps we’ll outline below:

• First, visit the Foreign Investment website: Here, you can find all of the necessary forms and guidelines.
• Find out if you are eligible: Visiting the website will help you determine if you’re eligible for the type of property you’re looking at purchasing.
• Complete your application: The website links to an online application form on the ATO website that you can fill out with all the necessary information and documentation, such as your investment intentions, current visa statutes, and financial capability.
• Pay the application fee: Submit the fee required for the application on the Foreign Investment website. The fee will differ depending on the cost of the property. So, generally, this will be higher on more expensive properties or land.
• Wait for your application to be approved: Once you’ve submitted it, the ATO will review it. If it is approved, you’ll receive a notification along with any other conditions attached to it.
• Proceed with the property purchase: After your application is approved, you can proceed with your property purchase within the conditions listed in your approval from the ATO.

Are There Fees Involved In Purchasing Property?

Yes, in addition to the application fee we’ve highlighted above, there are additional fees for property and land purchases in Australia.

In WA, Foreign Buyers Duty will need to be paid in addition to all other standard home-purchasing fees that Australian citizens must abide by.

This stamp duty differs from state to state in Australia. In WA, the Foreign Buyers Duty is charged at 7% of the dutiable value of the property being acquired by a foreign owner.

What Is The Annual Vacancy Charge?

A non-permanent resident who buys an Australian residential property but does not live in it or rents it for at least six months every year is subject to an annual vacancy charge.

The charge amount is determined by the Australian Taxation Office (ATO). It is usually paid when a non-resident owner of an Australian property lodges their annual vacancy fee returns.

Do You Need To Pay Tax On An Investment Property In Australia?

Overseas investors must declare the income on any investment property they own in Australia. This is done through an Australian tax return, and any maintenance costs may be claimed as tax deductions.

If you sell your property, you may also be eligible to pay capital gains tax (CGT) if your property value has increased during the time of ownership. The Foreign Resident Capital Gains Withholding measure may impact the sale, with an amount withheld and paid to the ATO on your behalf to cover some or all of the capital gain. 

When you sell your residential property, you must also notify the Register of Foreign Ownership of Australian Assets.

Contact Us Today

If you’re an overseas or non-permanent resident investor approved by the ATO to purchase property in Australia, we are the settlement agents who will be right here to guide you through your contract.

If you would like to have a chat to understand residential settlement processes in Perth better, why not contact our friendly team at KDD Conveyancing today? 
If you’re interested in learning more about property settlement or conveyancing in Perth or the WA property industry, feel free to check out our blog.

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