Due to the long popularity of the Australian property market, many people are looking to buy a building for their children so that they can live in Australia in the future or the whole family can immigrate to Australia. The potential for investment appreciation is also excellent.
However, for parents, some problems continue to linger. For example, whose name will the property be in, and can international students buy a property in Australia?
When buying real estate in Australia, the contract can be put in your name, your child’s name, or both. The basic condition is that the child must be 18 years old. I suggest that even if the property is bought for children to live in whilst studying in Australia, it is best to place it in the parents’ names.
There are 3 main points to consider:
1. It is inconvenient to apply for a mortgage
From the perspective of buying a house, you must provide proof of income. If you buy a house in your child’s name, students cannot handle a mortgage in Australia without income. Although international students can also provide income proof through work in Australia, applying for a mortgage to buy property is still difficult because of their low salaries and unstable work.
If the parents buy a house and add the name of their child, there is the problem that the child does not have the income to reduce the parent’s loan ability because children still depend on their parents.
2. The risk of property
Putting the property solely in your child’s name whilst they study is not recommended. When young people come to study in Australia, they often want to fall in love, and sometimes they live under one roof. But according to Australian law, if this relationship breaks down, the other party may enjoy legal protection.
For example, Australia’s cohabitation relationships (including same-sex relationships) enjoy legal protection. Once the two parties live together for 12 months, they can be defined as being in a “de facto” relationship. After a relationship breakdown, the division of property stipulates that the property of both parties will be regarded as putting joint income into the overall asset pool.
We sometimes see similar incidents in Australian news where two international students studied together and fell in love in Australia. After breaking up, the other party claimed half of the other person’s property, including real estate.
3. Influencing children’s preferential policy after immigration to Australia
The Australian government has the first tax discount for local citizens and permanent residents. If parents buy a property in Australia when their children are studying here, the child already had a property in Australia before they immigrated.
Therefore, although international students can buy property in Australia, the most secure thing is to put the house under the name of their parents. There is no loss in doing so because Australia has no inheritance tax for direct relatives. Therefore, in the future, children can inherit real estate in Australia without paying inheritance taxes. If inheritance is used for the purposes of overseas property investment in Australia, you need to pay related value-added tax when selling real estate.
You can also watch the video below to learn more about Australia property news:
Alison’s Story
Born in Hong Kong an moved to Australia, I have been associated with real estate all my life. As the plane slowly landed on the runway of Melbourne Airport, my life and career also changed to another runway. I changed from a Hong Kong real estate agent to an Australian real estate agent, and successfully obtained the Australian lawyer qualification.
When I was working in a law firm, I was surrounded by highly educated professionals. Even though their wages are very well, and they are absolutely the elites in society, but their lives are full of hard labor, and it’s hard for them to get rich through buying properties.
So I spend all my time and effort on learning financial and real estate investment knowledge, hoping to achieve financial freedom as soon as possible, and let my parents who have worked hard for many years live a good life.
Now I will share with you the knowledge and experience of investing in Australian real estate, and embark on the road to financial freedom together.
Alison Australian real estate information platform
The original intention of Miss Alison to establish investwithalison.com is to provide neutral Australian real estate information through this platform and help investors establish the most suitable investment strategy.
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