Renting or Buying in Australia
Renting or Buying in Australia
When you first arrive in Australia you will probably go for a rental property first in order to get to know the area and then decide if and where to buy your future home.
It is always advisable to rent for at least a year or during different times of the year, as some areas in Australia can be unbearable hot during the summer months while in other areas the rain seems never to stop.
Most realtors are showing only on certain days, so it is almost impossible to go look at properties whenever you feel ready to do so. So if you wish to see several properties on one day it takes some planning on your part. Try to get a list of available houses from the realtors in the area you wish to move to and drive around looking at the houses from the outside. Once you have a list of houses you like to visit, you can arrange a viewing with the realtors and if luck is on your side and the timing is right you might be able to view five or six houses.
Once you found the house of your liking you will have to fill out an application form and if all goes well and your application is accepted you can soon move into your new home.
Rent is often listed per week, and you are likely to be required to pay the first two weeks rent in advance along with a bond (deposit), which is usually four weeks rent.
If you decide to buy a property you should be aware that prices are the highest in the major cities like Sydney, Perth, Brisbane and Melbourne. As many foreigners arrive on a skilled migrant visa, they prefer to move into the cities where it is easier to find work. Others who decide to open their own business or are retired might prefer to move to the Gold Coast or Cairne, where money can be made in the tourist business.
In order to buy buy a property without being an Australian citizen or permanent resident you need the permission of the Foreign Investment Review Board (FIRB) to purchase a property. After receipt of your application it will take the FIRB between 40 to 130 days to approve the same. If you decide to sign a contract before the approval you have to make sure that the contract is is conditional on receipt of approval, otherwise you will be in breach of contract and liable for financial penalties.
Without the approval of the FIRB you won’t be able to participate in auctions to purchase a home though.
When buying property in Australia you will have to pay fees and taxes in order to make the purchase final. The most expensive fee is the stamp duty both on the purchase price of the house and the value of the mortgage taken out on the house, which can, depending on the location, add 3% and 5% to the cost of an average home, and even more to a luxury home.
The transfer or conveyancing fee is the highest legal fee you will have to pay. The amount varies from state to state and can be between $ 1000 and $ 2000, but it is always advisable to ask your lawyer or conveyancer about the exact fee they are charging.
Other costs are for pest control, surveys, insurances, council rates, body corporate fees, liability insurance to cover any damage that may occur to the property and a regular contribution to a sinking fund.
The land tax is based on the unimproved value of land while the buildings on the land are excluded from the tax; however in reality the States and Territories all apply this law differently so it is always best to ask your lawyer about the taxes in the area you are buying property.
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Conclusion
I hope you enjoyed this article: Renting or Buying in Australia. If you would like additional information, please contact our office HERE. Also, I would like to share a few articles I hope you will enjoy on Australia!
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