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Overseas Borrowers

Austral is pleased to lend to non-Australian residents and overseas borrowers.
In fact, much of our internet business comes from Australians living abroad.

If you would like us to we can help you with all aspects of your Australian property purchase, including making contact with Solicitors, Valuers and Real Estate Agents on your behalf.

How to Qualify (for non-Australian Residents)
NZ Based Borrowers

Overseas borrower restrictions do NOT apply to New Zealanders wanting to purchase in Australia.

In the past there were guidelines imposed by mortgage insurers that required rental income to cover interest payments which in turn limited the amount one could borrow.

Recently the mortgage insurers lifted these restrictions so that New Zealanders can apply for the same loan products on the same basis as Australian Permanent Residents or citizens.

Please visit our Trans Tasman Finance page for all relevant information.

All other Overseas Based Borrowers

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As a non-Australian resident, your property purchase must be for investment purposes. You must intend to rent your new property.

The Maximum Loan to Value Ratio is 75%. This means you need at least a 25% deposit. As a rule of thumb, acquisitions costs usually equate to around 5% of the purchase price.

You will need someone to act as your Power of Attorney for the signing of the Mortgage and related documents. An Australian solicitor can usually establish a Power of Attorney for a small fee (usually around $200). We would be pleased to introduce you to an appropriate solicitor.

FIRB Approval

As an overseas borrower wanting to purchase in Australia you must obtain approval from the FIRB (Financial Investment Review Board) before you settle on a purchase. There are some exemptions. If you do not have FIRB approval when you exchange contracts make sure that your contract is subject to FIRB approval.

How long will an application take?

FIRB is required to make a decision within 30 days of receiving a statutory notice with another 10 days in which to advise the parties of the decision. That time period may be extended by a further 90 days if necessary.

Government policy on the acquisition of residential property by non-Australians is broadly as follows:

“The Government seeks to ensure that foreign investment in residential real estate increases the housing stock. The Government, therefore, seeks to channel foreign investment into activity that directly increases the supply of new housing (that is, new developments - house and land packages, home units, townhouses, etc) and brings benefits to the local building industry and their suppliers.

The policy on developed residential real estate is negative. The effect is twofold. First, it helps reduce the possibility of excess demand building up in the existing housing market and secondly, it aims to encourage the supply of new dwellings, many of which would become available to Australian residents, either for purchase or rent, therefore maintaining greater stability of house prices and the affordability of housing for Australians.”

There are different guidelines for the acquisition of commercial property, rural property, accommodation property etc.

For more information and details on how to apply for FIRB approval go to:
http://www.firb.gov.au/content/real_estate.asp

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Austral is a member of the Mortgage & Finance Association of Australia (formerly MIAA), the professional body for the mortgage industry.

PH: 02 9299 1833 / FAX: 02 9299 1874

TODAY: Saturday, 4th July, 2009

Private Ruling Authorisation Number 81797 - APRIL 2008
April 2008 Private Ruling Authorisation Number 81797 http://www.ato.gov.au/rba/content.asp?doc=/rba/content/81797.htm Facts: The taxpayer sought to claim as a deduction the capitalised interest on additional borrowings used to meet the shortfall between the rental income on his investment property and the interest, rates and maintenance costs he paid in relation to the property. The taxpayer advised the ATO that he did not want to use his personal income to repay his private home loan debt or reinvest in other income-producing assests.

PUBLIC TAX DETERMINATION DT2008/27
DECEMBER 2008 Public Tax Determination TD2008/27 http://law.ato.gov.au/atolaw/view.htm?locid=TXD (then follow the prompts) TD 2008/27 has now clarified the position for the public generally. The factors that will determine the deductibility of interest are:

My Choice
Austral has recently expanded its product offering through its My Choice loan initiative. My Choice provides borrowers with access to a wide range of lenders and loan products for residential, commercial and equipment finance, so no matter what your need our friendly and experienced staff can assist you.

NAB BOSS TO IGNORE RATE CUTS - APRIL 2009
RESERVE Bank interest rate cuts will no longer have any significant influence on home mortgage rates, a bank chief said yesterday.

WEALTH MAXIMISER - INVESTOR ASSIST UPDATE - JUNE 2008
The ATO has recently published an edited version of a Private Ruling on its website: http://www.ato.gov.au/rba/content.asp?doc=/rba/content/81797.htm A taxpayer and client of Austral Mortgage, applied for the private ruling to seek confirmation from the ATO that if there was a shortfall between his investment income and his investment outgoings then that shortfall could be capitalised under the home and investment loan & line of credit structure noted in his application.

WEALTH MAXIMISER UPDATE - MAY 2008
Ever since the High Court decision in Hart's case, taxpayers have been seeking clarity from the ATO on the deductibility of capitalised interest in certain loan structures. On 16th April 2008 a favourable Private Ruling issued to an Austral client that provides insight into the ATO's current thinking on the subject.

WEALTH MAXIMISER UPDATE - FEBRUARY 2008
Wealth Maximiser Update 12th February 2008 - We have advice from the ATO that it is well advanced on a binding Tax Determination regarding the deductibility of capitalised interest on a line of credit facility. Borrowers with both a home loan and an investment loan should consider including a capitalising line of credit within their loan structure or at least ascertaining from their lender that they could access such a facility by way of a simple variation of their existing mortgage.

Trans Tasman Finance
Did you know that Austral has a wholly owned subsidiary, Gem Home Loans Limited, in Auckland NZ - we are able to assist with organising mortgage finance for you should you be considering buying property in NZ.

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