Introducing Plans by UNO 🚀
Are you a New Zealander thinking about buying property across the ditch? Whether investing in Australian property from New Zealand or buying a new home to move to Australia, both are possible.
It can be easier than you think; New Zealanders are essentially treated as Australian citizens when buying property within Australia. Those with permanent resident status may even be eligible for stamp duty exemptions or first home owner grants.
With a median house price of AUD 720,000 and a more diverse property market compared to New Zealand, where the median house value sits at AUD 856,000, Australian property can be an attractive purchase for Kiwis.
There are some key considerations like borrowing power, stamp duty, and foreign investor duty to consider. Here is everything you need to know about buying Australian property as a New Zealand citizen.
New Zealand Citizens are effectively treated as Australian Citizens when buying property within Australia and may even be eligible for first the home owners grant.
All New Zealanders who have been granted Permanent Resident status (i.e., through a Special Category subclass 444 visa) can purchase property within Australia.
There is no magic number for deposits in Australia, but most lenders require you to show savings for at least 10% of a property’s value. Some lenders only require 5%. This equates to a deposit between $40,000 and $80,000 to buy a house worth $800,000.
There may also be additional costs, including stamp duty, lender’s mortgage insurance, and conveyancing fees. You can read more in UNO’s guide to home deposits here.
You can get a mortgage at the same interest rate as Australian citizens. UNO can help you compare from over 20 lenders to find the best rate.
Stamp duty is a tax on property charged by Australian state governments. It is generally around 3% but varies by each state.
For example, the stamp duty on an established home to live in as a first home buyer worth $650,000 is $22,251 in Queensland or $29,148 in New South Wales, according to the UNO Home Loan stamp duty calculator. These figures change often and are subject to applicants’ circumstances. You can check specific figures with a UNO broker closer to the point of application.
First-time buyers in Australia qualify for concessions on stamp duty in some states pending certain criteria. Typically there are house value thresholds for exemptions and the home needs owner-occupied for at least twelve months. Read our state-specific guide to concessions here.
New Zealanders purchasing their first home in Australia usually qualify for these concessions, too. However, there are specific rules for each state. In New South Wales, for example, NZ citizens need to reside in Australia for at least 200 continuous days within 12 months to qualify for an exemption.
You can check state-specific guidance or ask a UNO broker to assist you later during your home-buying journey.
NZ citizens are considered permanent residents and are therefore eligible for the Australian Government’s First Home Owner Grant (FHOG), a useful leg-up to help with buying your first property in Australia.
Introduced in 2001, the FHOG is a national scheme co-funded by state and federal governments designed to encourage and assist with first-time homeownership for eligible buyers.
The grant varies in each state and territory—ranging from $10,000 in Victoria and new south wales to $30,000 in Tasmania—and is paid as a once-off grant to eligible first-home buyers.
Criteria varies by each state. Generally, the house will need to be new, under a value of $750,000, and occupied by the purchaser for at least 12 months after purchase.
Property held in New Zealand does not impact eligibility for the FHOG.
Want to know whether you’re eligible? A UNO broker can help assess your eligibility for any grants, including the FHOG. Get in contact today.
Read more:UNO’s guide to FHOG eligibility in each state and territory
Although no small decision, buying a property once you arrive in Australia could be easier and quicker than you think. It could even save you thousands of dollars when you compare the cost of a short-term rental against buying from across the ditch.
Before 2015, those who held a KiwiSaver for at least three years could withdraw contributions for a house deposit provided $1,000 remained in their accounts. However, since the 2015 ‘HomeStart’ amendment to KiwiSaver - which introduced the caveat that properties need to be within New Zealand - New Zealand residents cannot use their KiwiSaver funds to buy Australian property.
There is some good news for NZ citizens buying property within Australia, though. New Zealanders can transfer their KiwiSaver balances to an Australian Superannuation fund (the Aussie equivalent) and access any voluntary contributions towards a house deposit.
The Australian Government’s First Home Super Saver (FHSS) allows access to voluntary superannuation funds towards a house deposit. These need to be genuine (non-employer) contributions to a maximum of $15,000 per financial year, up to a total of $50,000 across all years. So, any non-compulsory funds from your KiwiSaver can be accessed once transferred to an Australian superannuation account.
Read more: Your Guide To The First Home Super Saver Scheme
For New Zealanders seeking to purchase Australian property from outside Australia, whether as an investment or ahead of moving to Australia, both are possible. As an investor, you will need to pay stamp duty and additional foreign duty.
Australian lenders often won’t consider New Zealanders for investment loans. However, UNO has lenders who specialise in mortgages for kiwi investors buying property in Australia - your repayments may even be similar to Australian rates with our lenders.
It is easier for New Zealanders to invest in Australian property compared to other countries. Purchases don’t require approval from the Foreign Investor Review Board (FIRB) and can include existing property or land, unlike other foreign citizens.
An exception applies for those on a Subclass 461 New Zealand Citizen Family Relationship Visa, who will need to seek approval from the FIRB.
It can sometimes be tricky to find a lender who will approve mortgages for foreign citizens, but uno home loans works with lenders who do. They can even help you release the equity in your NZ home. Want to get pre-approval as an investor? Book a time to chat with us today.
New Zealanders buying property from outside of Australia need to pay an additional Foreign Transfer Duty of 7-8% depending on which state the purchase is made in.
For example, the foreign duty on a $750,000 home in Queensland is $52,500, bringing the total cost up to $802,500 excluding stamp duty.
Foreign duty varies by each state. There is no foreign duty in the Northern Territory.
Other taxes, including Capital Gains Tax and Non-Resident Withholding Tax, may be payable on property held by a foreign investor.
Capital Gains tax is a tax on the profits acquired from the sale of an asset including real estate. The rate is dependent on your income.
Foreign resident capital gains withholding (FRCGW) is payable on the sale of a property valued over $750,000. The tax rate is 12.5%.
An accountant or tax agent can help you navigate any additional property taxes.
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