Table of Contents
Table of Contents
Can New Zealand citizens buy property in Australia? The answer is a big YES! However, there can be a bit of confusion when it comes to buying in Australia. In this article, we will tell you everything you need to know about buying a property in Australia and answer all of your questions. We will also cover whether or not you are eligible for the First Home Owners Grant.
Note: We can only assist if you are a New Zealand citizen who is LIVING and WORKING in Australia. If you are LIVING and WORKING in New Zealand we cannot assist with finance due to restrictions with our credit license.
But we have included details below on lenders that can assist if this is your situation.
Quick Overview - New Zealand Citizen Home Loans
- Eligibility: New Zealand citizens can buy property in Australia.
- Loan Amounts:
- Up to 95% of property value if living in Australia.
- Up to 70% if living in New Zealand or elsewhere.
- Interest Rates: Vary by lender; higher rates likely if living outside Australia.
- Visa Holders: 461 Visa holders can qualify for home loans.
- Government Approval: Not required for standard residential property.
- Stamp Duty:
- Exempt from surcharge if on a Special Category Visa.
- Additional 7% for Foreign Acquirer Duty in Queensland if living outside Australia.
- First Home Owners Grant: Eligible for $15,000 grant in Queensland; conditions vary by state.
- Eligibility for Home Guarantee Scheme: As of June 21, 2024, New Zealand citizens who hold a Special Category Visa Subclass 444 (SCV) are eligible for the Home Guarantee Scheme, subject to meeting all other eligibility criteria.
- Investment Properties: Eligible to purchase; subject to specific conditions.
- Non-Resident Withholding Tax: May apply if living in New Zealand.
- Documentation Needed:
- Identification: Passport, driver’s license, or birth certificate.
- Financial Information: Bank statements, pay slips, tax returns, and proof of savings.
- Employment Details: Employment contract, recent payslips, and a letter from your employer.
- Visa Information: Visa grant notice if applicable.
- Property Details: Contract of sale, details of the property, and valuation reports.
- Other Documents: Credit report, rental statements (if applicable), and a list of assets and liabilities.
- Next Steps: Contact a mortgage broker for personalised assistance and to navigate the process effectively.
Can I get a home loan in Australia?
If you are a New Zealand citizen, you can buy townhouses, detached houses, units, vacant land and even commercial properties. However, the property must be in Australia. We are not able to help you buy a house in New Zealand from Australia.
How much can I borrow?
How much you are eligible to borrow depends on your personal situation and each individual lender’s policies. However, as a general rule, you can borrow:
- Up to 95% of the value if you are living in Australia as a New Zealand citizen. If you are a non-New Zealand citizen living in Australia on a 461 visa (New Zealand Citizen Family Relationship Visa), you will be eligible to borrow up to 95% of the property value and may be eligible for the first homeowners grant.
- Up to 70% of the property value if you are living in New Zealand. Some lenders like ANZ Bank and Westpac will allow you to borrow up to 70% of the property value if you are not living in Australia. But if you are buying in Queensland, you will need to pay the Foreign Acquirer Stamp duty, which will add 7% to the standard stamp duty costs. On a $500,000 purchase, this would mean a total of $52,461 in stamp duty payable (on top of your 30% deposit). As mentioned above, we cannot assist you with arranging finance if you are working and living in New Zealand.
- Up to 70% of the property value if you are a New Zealand citizen living elsewhere (i.e., not in Australia or New Zealand). However, as a non-resident in Australia, you may need to pay a higher rate of stamp duty. In Queensland, this is an additional 7% of the property’s value. As mentioned above, we cannot assist you with arranging finance if you are working and living abroad.
Latest update: New Zealand citizens now eligible for the Home Guarantee Scheme
Home Loans for New Zealand Citizens in Australia
Following the announcement from Housing Australia on Friday 21 June, New Zealand citizens who hold a Special Category Visa Subclass 444 (SCV) are eligible for the Home Guarantee Scheme, subject to meeting all other eligibility criteria. Here’s what you need to know:
Home Guarantee Scheme Eligibility
- SCV Subclass 444 Holders: Eligible for the Home Guarantee Scheme if all other criteria are met.
- Verification: Verify SCV subclass 444 via a VEVO check or sighting the original visa.
Procedures and Updates
- Application Process: Continue to follow Home Guarantee Scheme procedures on Commbroker to lodge new applications.
- Residency Confirmation: When confirming customer residency status via VEVO, proceed with the HGS application if the customer is a New Zealand citizen on a special category visa subclass 444.
- Documentation: Image a copy of the Visa/VEVO check to the application.
- Commbroker Updates: Updates will be available by Monday 1 July.
Important Dates
- Scheme Places Release: On Monday 1 July 2024, the Australian Government will release FY25 Scheme places for the First Home Guarantee, Family Home Guarantee, and Regional First Home Buyer Guarantee.
- Eligibility Period: From 1 July 2024 to 31 August 2024, customers can secure a Scheme place prior to receiving their Notice of Assessment for the year ended 30 June 2024.
Required Actions
- Notice of Assessment: Formal approval is conditional on obtaining a Guarantee Certificate before settlement. Encourage customers to obtain their Notice of Assessment for the year ended 30 June 2024 as soon as possible to minimize settlement delays and/or Scheme expiry.
- Home Buyer Declaration: For all FY25 Scheme places, an FY25 Home Buyer Declaration must be provided. An incorrect declaration will delay the issuance of a Guarantee Certificate.
Required Documentation
To secure a Scheme place, the following documents must be provided:
- Proof of Citizenship or Australian Permanent Residence
- Medicare Card
- FY25 Home Buyer Declaration (if available)
- Notice of Assessment, year ended 30 June 2024 (if available)
Document Verification
Supporting documents can be:
- Certified copies
- Photocopies if verified face-to-face by the broker at the time of interaction
- Verified copies from legitimate third-party agencies such as Credit and Government agencies.
What will my interest rates as a New Zealand citizen be like?
If you are not an Australian citizen but are living in Australia, your interest rates may vary depending on each lender’s policies, as some lenders charge higher rates for foreigners. If you are living outside of Australia, you have a higher chance of paying higher interest rates. This is why it is important to work with a mortgage broker who can determine which lender suits your loan needs best and can provide you with the best interest rates. For example, we can
get you the same interest rates even if you are lending up to 95% of the property value. Also, if you’re applying with a low deposit, there may be a suitable solution for you.
Do 461 Visa holders qualify for a home loan?
The 461 visa is a New Zealand Citizen Family Relationship (temporary) Visa, which allows those who are not ‘New Zealander’ to live and work in Australia for up to five years. To qualify for a home loan under this visa, you must be part of a ‘family’ with a New Zealand citizen in Australia and be on a temporary Special Category visa (subclass 444) or SCV. A ‘family’ is considered either married, in a de facto relationship, or you are the child or stepchild of the New Zealand citizen or their partner. It is best to speak with a qualified advisor about visa requirements.
You will need to have your visa fully approved before you can apply for the home loan. If both applicants hold a visa, the focus will be moved to the 461 visa. Often, the borrowing capacity for those on this visa is limited to 70%. However, some lenders will go up to 95%. Get in touch with us today to find out how much you can borrow on the 461 Visa.
What about if I'm a New Zealand citizen wanting to buy in Australia, but I am still living in NZ?
Although it is perceived that if you’re living in Australia, you are a lower-risk borrower than if you’re in New Zealand, Australian lenders are mindful of the Australia-New Zealand tie when going through the mortgage process. So you should be able to buy a house without problems. The biggest issue most New Zealand-based citizens face is the additional stamp duty payable on purchases in Australia. In Queensland, the Additional Foreign Acquirer Duty adds 7% to the regular stamp duty payable. In addition to this, you will be required to provide a minimum 30% deposit to qualify for a loan.
If you live in Singapore, Hong Kong, the UK, or the UAE, the process can be a little harder as these countries are not seen as having any ties to Australia. Some lenders will still allow you to borrow, but it is really on a case-by-case basis.
As mentioned above, due to limitations with our credit license, we cannot assist with finance if you are living and working in NZ. Some banks, like ANZ and Westpac Banks based in Australia, can consider your situation on a case-by-case basis, but you will need to discuss it with them directly.
Read More: Calculate how much stamp duty you will need to pay.
Do I need approval from the government?
If you are a New Zealand citizen looking to buy a standard residential property, you do not need the approval of the Foreign Investment Review Board (FIRB). Your home-buying process is exactly the same as that of an Australian citizen buying a property in Australia. However, if you are looking to buy commercial property, you may need to get FIRB approval.
Speak to our team of experts about this for more information.
Why are so many people investing in Australia now?
In 2016, the Reserve Bank of New Zealand put a speed limit on banks’ lending, which has reduced the number of loans that can be approved for investors with a low deposit (less than 40%). Due to this, New Zealand property investors are turning to Australia because they can still purchase property with a lower deposit.
Can I buy an investment property?
The good news is yes! As a New Zealand citizen buying in Australia, you are eligible to use your loan for any kind of residential housing, whether you want to live in it or buy it as an investment property. Commercial loans depend on the circumstances, so it’s best to seek advice from a mortgage broker (us!) about your personal situation.
Do I have to pay stamp duty?
The government introduced a Stamp duty surcharge in 2016 specifically for foreigners looking to buy property in Australia. When citizens from New Zealand arrive in Australia, they are allowed a Special Category Visa (subclass 444). If you are on this visa, you will be exempt from having to pay stamp duty surcharge, which is normally required for New South Wales (NSW), Victoria (VIC), Queensland (QLD), Western Australia (WA), South Australia (SA), the Australian Capital Territory (ACT) and Tasmania (TAS).
However, you’ll need to be aware that in New South Wales, you’ll need to be in the country for at least 200 days to avoid this fee. You’re also required to be in the country at the time of settlement and contract signing to be eligible to avoid the stamp duty charge. The only state that you can remain outside of Australia at the time of settlement is the Northern Territory.
Non-Resident Withholding Tax
If you live in New Zealand, you may be subject to Non-Residence Withholding Tax. The tax, in summary, is as follows…. If you were given a normal interest rate of 4.00 %, you’d effectively be paying 4.40% due to the tax. So, in certain circumstances, it’s best to make a purchase with a small deposit and refinance to find a lender that meets your criteria to avoid paying the additional tax.
Non-Resident Withholding Tax is a complex situation that we recommend you speak with your accountant about. You’ll need to ensure you meet the lending criteria; otherwise, you may be forced to pay the tax.
What about the First Home Owners Grant – are New Zealand citizens eligible?
Since New Zealand citizens are considered permanent residents of Australia, they are eligible for the $15,000 grant. However, each state may have some variations. For example, in NSW, you’ll need to have lived in the country for over 200 days to be able to buy a property and apply for the First Home Owners Grant.
If you are a first-time home buyer, you may also be eligible for waived stamp duty – meaning you could pay zero stamp duty and save thousands!
Can I use equity to buy a property in Australia (from my property in New Zealand)?
If you’re thinking about using your equity from a property in New Zealand, you’ll need to follow this process:
- First, refinance your mortgage and release the equity in New Zealand – you’ll need to seek guidance from your bank in New Zealand for assistance on this.
- Next, purchase the property in Australia with the equity from your property in New Zealand
Some finer details: You will be eligible to borrow up to 60% of the value of your NZ investment property or up to 80% of the value of your owner-occupied home in New Zealand. If you want to borrow more, some lenders can help you, but you may have to pay higher interest rates.
Can I buy a previously owned property?
Yes! Normally, foreign citizens are only eligible to purchase new properties in order to comply with Australian legislation. But if you are a New Zealand citizen, you can buy as though you are an Australian citizen — meaning you can buy new or existing properties.
Why do we get certain rules as a New Zealand citizen?
As always, it depends on the bank you’re working with, so it’s important to get a good mortgage broker (like us) to help sort out your situation. Certain banks actually favour New Zealand citizens due to the joint agreements for legal, trade and residency purposes in their country. New Zealand also uses VedaScore, which Australia also uses as its chosen credit reporting system, so the whole process is a lot easier. You don’t need to be an Australian citizen to apply for a home loan in Australia.
What documentation will I need to apply?
To help your application go through as quickly as possible, you’ll need to bring supporting documents like bank statements, payslips, and identification. Contact us for a free assessment to chat about your personal situation.
Next steps and buying a home in Australia
Ready to buy a home in Australia but don’t know where to start? Our team of home loan experts at Hunter Galloway is here to help you buy a home in Australia. Unlike other mortgage brokers who are just one-person operations, we have an entire team of experts dedicated to making your home loan journey as simple as possible. Our service does not cost you anything, as we are paid by the lender when your home loan settles.
If you want to get started, please give us a call on 1300 088 065 or book a free assessment online to see how we can help.
Note: The information on this page is general and should not be considered as advice. Before you act on this information, you must seek independent legal and financial advice.
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