If you’re an Australian living abroad, you may want to purchase a home as an investment or to live in when you return. First and foremost, is it possible? Can you buy a house in Australia without physically inspecting it? The answer is yes on both counts. However, the critical question is: how do you go about it? You certainly can buy a house while living abroad if you’re a citizen or a permanent resident. You can do so without actually setting foot inside the property. Recent lockdowns led to many buyers securing properties while they were unable to inspect them in person. Moreover, this will become more prevalent now that we have the technology and interconnectivity to do so. There are rules and regulations to navigate, but nothing that necessitates your physical presence. The major concern is whether or not you’re 100 per cent sure about what you’re buying.

Yes, If You’re Living Overseas You Can Buy A House In Australia… but!

If you’re an Australian citizen or a permanent resident, no law prevents you from buying a property here. But you’ll pay the same stamp duty, etc. Foreigners and non-residents are subject to strict criteria. The laws changed in 2015, requiring that foreign investors either buy a new property or develop vacant land. Moreover, they must do so within four years from the date of approval. The rest of us can acquire a house or land just like other Aussies. However, your tax status is paramount. This is the most important factor to determine before you buy a house in Australia. Government departments have different criteria for determining the status of an Australian. However, the Australian Tax Office (ATO) offers the best examples. Your status is dependent upon whether you reside outside of Australia or are domiciled in Australia. We’ll take a look at this below to clear up confusion.

Again, knowing your status is essential. If you fall into the class of a foreign buyer, you’ll also pay two types of surcharges on residential land. Firstly, there is the surcharger purchaser duty. This amounts to eight per cent, which is in addition to your transfer duty. Then there is the surcharge land tax. The surchargeable land tax is due on every property you own after December 31 of each year. This is in addition to any land tax you may pay. You may still need to pay the surcharge even if you already pay land tax. The best advice here is to consult the ATO. Everybody’s situation is slightly different. You may fall into the category of a foreign buyer, even if you’re a citizen. You’ll need to know your obligations and whether you might be entitled to any concessions.

Residency Determines If You Can Buy A House

You may be allowed to buy a house in Australia but must seek approval from the Foreign Investment Review Board. This is contingent on your status, which is subject to four tests. The tests are:

• The residence test
• The domicile test
• The 183-day test
• The Commonwealth Superannuation Fund Test

In the first instance, you are deemed to reside in Australia if you ‘dwell permanently, or for a considerable time.’ Your usual abode is in Australia. If you reside permanently outside of Australia, you are considered to be a foreign resident. For example, if you work for a year or so outside Australia and rent out your home, you’re a resident. But if your stay is much longer, say, three years, then your status is a “foreign resident.” Even if, in the latter case, you too are renting a home, this will not mitigate the circumstances.

You will, because of the length of your stay abroad, be considered to have abandoned your home. If you spend half your time in Australia (the 183-day test), you are a resident. This is unless it is established that your “usual abode” is outside of Australia. The fourth test is only applicable to certain Australian government employees. Likewise, what also matters is the type of property you aim to buy and your reasons for buying it. If you fail the residency test and are looking for an investment property, you’ll be referred to the FIRB. Overall, if your status is established as a foreign resident, the same applies. Again, your best bet is to check with the Australian Tax Office. If you qualify as a resident, you may be entitled to apply for government schemes that assist home buyers.

Buy A Home With Government Assistance

Several government schemes exist to help those entering the market buy their first home. The range of offers saves the homebuyer in an area of prohibitive costs, such as lender mortgage insurance (LMI). Similarly, a new government scheme enables those under an income threshold to buy a home in a shared-equity scheme. With the new range of schemes, the government will guarantee loans with the buyer only required to pay as little as 2% of the property price. Another involves salary sacrifice. There are approximately five national schemes to assist those who’d otherwise be shut out of the property market. Each scheme is different and dependent upon your situation and financial circumstances. They’re designed for low-income earners and single parents and are available to Australian citizens. These may not include permanent residents. It’s best to check with a qualified financial advisor about the different schemes and their requirements.

How Not To Buy A House While Overseas

Now that you’ve embarked on your homebuyers’ journey, you’ll need to find your ideal property. Of course, you have choices. You may have somebody at home, such as a family member, to assist. This assumes you’re willing to entrust this person to find a house that will satisfy your tastes and requirements. You’d provide a broad outline of where you wish to live and the type of dwelling you’d prefer. You may be looking for a house or an apartment. In other words, you’d be leaving the house-hunting up to them. If they’re communicating with you in the old fashion, they’d forward their suggestions by mail. They would detail the house’s pros and cons in a letter and mail it to you. Naturally, it may take some time to reach you. And replying to them or querying them on any point would be at the mercy of overseas carriers.

This scenario presupposes that where you reside is quite backward. Perhaps you’re in a remote part of the world where there are no satellite dishes or the internet. This being the case, you’re hardly likely to find a post office either. But perhaps you do. We’re not being ridiculous but rather throwing this out there in the interests of thoroughness. It would not be practical at all to buy a house this way. By the time you’d reasonably communicated with your agent, the listing would’ve sold. Your offer may take six months to find its way back in the form of a letter. This says nothing about money transfers, providing documentation, or anything of that nature. More to the point, you’d be expected to entrust this person with your finances. Then, if all else goes well, you may return to find your new home is a converted cargo container.

Utilise Real Estate Agents’ Websites

You’re far more likely to do the smart thing and research properties on Australian real estate websites. You will want to see what you’re buying with your own two eyes, even if distance precludes a physical inspection. But you can do this now. It’s not solely a matter of looking up properties in the areas you desire and perusing their online photo gallery. You can now examine 3D floorplans and take a virtual tour of the house. You can visit Google Street View and check out the neighbourhood as well. If your imagination is also there, you can not only see but also visualise what’s on offer. The internet becomes your full tool of access and communication. But if you do require a human opinion, then you can ask a friend or a family member to inspect the house for you. However, they will merely be making a superficial appraisal.

You’re able to locate just about every resource that you’ll require online. You will need the services of a registered professional real estate agent. You can engage a buying agent, a solicitor or a conveyancer online. All the advice you need is either online or can be provided by your real estate agent. All that’s left up to you at that point is to choose a property. However, you’ll have to do so wisely. And you can use the online services to examine the trends and demographics of the areas that you’re browsing. Your agent will no doubt inform you of these, but you’ll want to feel you are doing something regardless. Indeed, it is advisable to commit to such research irrespective of who’s handling the physical work. All you need to do is be aware of the accurate timezone differences. Remain competent about your availability to facilitate smooth communication.

You’ll Need To Be Mindful

No doubt, even though you’ve found a property that you fancy, you’ll still have concerns. Chief among those will be whether or not there are structural issues or other problems with the dwelling. You’ll need to satisfy yourself that all the property lines are drawn correctly to avoid unforeseen disputes. While you’ll be remote from the process, you’ll still need to manage the project. You must get as many eyes on the property as possible. Seek out every relevant opinion. Employ whoever you need to make sure that the building inspection is thorough. You’re looking for defects, but also for other matters that’ll make for an unpleasant discovery upon your return. Pests are a major nuisance and a possible hazard to a dwelling. Do everything twice or more to give yourself peace of mind. Make certain that you return to your dream home and don’t stumble upon a nightmare scenario.

The rule of thumb is to act on any gut instinct you might have. This is sage advice. If you feel that something’s not right, then chances are it isn’t. Given that you’re in another part of the world, you’ll want to address any misgivings without delay. Perhaps your greatest worry is whether or not buying a house unseen is a foolhardy endeavour. You’d be correct to ask this of yourself but never fear. According to financial comparison site Canstar, it’s not unusual for Aussies to buy a house without inspecting it. Their research interestingly reveals that we are more likely to buy a property unseen than a pet or a boat. Statistically, 11 per cent of us would be willing to buy a house without viewing it in person. Meanwhile, 10 per cent would do so for a vehicle. Eight per cent of us would rent a property unseen.

Conclusion

Distance is no longer an object, courtesy of the technological advancements that gave us the digital universe. If you’re an Australian citizen or a permanent resident, you needn’t be physically present in Australia to buy a house. Ain’t that something? But the real zinger is that you can be so far away and still have an opportunity to reliably inspect a property. With 3D mapping and virtual tours, you can inspect a mansion in Melbourne’s Toorak while relaxing on a beach in the Costa del Sol. Once you’ve inspected it, you can put in a bid and then soak up the sun. Your agent will handle all the negotiating and paperwork; you just need the bickies to afford it all. However, whether you’re buying or selling a property, you’ll need the services of a professional real estate agent. Perfect Agent will match you with the ideal agent. Contact us today!