Selling Your Home & Buying Australian Property
Sell my house or rent it?
This is a complex question as there are so many factors to consider and the answer will vary from person to person. Some considerations when considering whether to sell or rent your home or investment properties:
- Are we certain that we shall stay permanently in Australia?
- Are we comfortable that a local agent can manage our property effectively and ensure it is kept to a high standard
- How will we manage maintenance issues with our property from abroad.
- Can we afford to leave behind enough capital for unforseen costs, to cover mortgage payments if a tenant moves out, etc.
- What is the current exchange rate and would I be better off sending proceeds from the sale of property to Australia to invest there.
- What is the state of the property market at home and would we be better off selling now or later.
- What are the local and Australian tax implications of keeping property vs. selling (i.e. annual tax return requirements / costs, capital gains tax implications, etc.).
- How rentable is our property and how quickly can we find a reliable tenant.
- If we keep our property, what is our long-term plan.
Buy Australian Property Before or After Arrival?
Again, a complex decision and one that will vary depending on your circumstances, the future for the Australian property market and what your long-term objectives are. The Australian property sector has remained strong and delivered positive growth in general over the past few decades. Some analysts and economists feel that the Australian property market is over valued and comparatively expensive, though the Australian economy has continued to out perform those of the other OECD (Organisation for Economic Cooperation and Development) for and similar economies. It is difficult to compare Australia to any other country as our economy, the driving forces thereof and strong trade ties with the world’s fastest growing region (Asia and China in particular) could present arguments for further growth in the property sector.
The potential negative for buying a home or investment property before you arrive or before you reach permanent residence status is the Australian Foreign Investment Review Board (FIRB) and the restrictions on foreign property ownership that will apply before you live in Australia. The FIRB limits property ownership by foreigners (including temporary residents) to new built houses and property developments approved for foreign ownership if you buy before you arrive in Australia to live here. Temporary residents living in Australia are generally allowed to buy an established (i.e. as opposed to new, never been previously owned) home as their principle place of residence when they are living in Australia, subject to FIRB approval. Permanent residents do not have any restrictions on the type of house or number of houses they buy as long as they are living in Australia (buy after you arrive). For more information on FIRB, please visit the Foreign Investment Review Board website.
Newly arrived migrants with permanent residence visas / status also qualify for the First home owner / buyer grant, which is a financial federal (and state) government incentive to assist first home buyers with some of their costs. This varies from state to state and property types, please see the First Home Owner website for details on the scheme(s) and select the state or territory where you are considering moving to.
