Buying a property in Australia is a major investment. Many significant costs will apply, such as paying various taxes and fees.
Some fees that may be incurred when buying Australian property will increase the cost of house purchases to a certain extent, not only in money but also time. Therefore, all costs involved in buying Australian real estate should be considered in advance to avoid unexpected financial constraints as much as possible.
In addition to the standard fees and costs of buying property in Australia, this comes with a number of holding costs. These costs generally include overseas buyer fees (FIRB), stamp duty, lawyers’ expenses, real estate loan institution costs, housing property insurance premiums, market capacity construction fees, sewage costs, land taxes, or property fees.
1. Overseas buyer fees (FIRB)
For overseas people, the Foreign Investment Review Board Australia applies an overseas buyer fee, which is a cost that must be calculated when buying property in Australia. According to the current regulations, foreigners (referring to those who have not yet obtained Australian permanent residence) wanting to buy buildings in Australia must get FIRB approval by filling in a residential real estate application form and paying the application fee. Residential real estate that overseas people can apply for in Australia includes new housing, secondhand housing (with restrictions), redevelopment of a property, housing, and idle residential land.
2. Stamp duty
Australian governments levy stamp duty on buying real estate, but some states and territories will also charge stamp duty surcharges for overseas buyers who want to buy property in Australia. Taking Melbourne as an example, it is 8%. However, compared to Singapore and Vancouver, which levy 20% surcharges on foreign buyers, the foreign stamp duty surcharge for Australian property does not seem so high. In addition, buyers who purchase land house projects in Australia can sometimes save stamp duty.
3. Conveyancing fees
The legal transfer of property ownership in Australia and the right to real estate ownership is generally carried out by a lawyer who handles the property transfer certificate. Individuals have no way to handle it. Therefore, the cost of lawyers is also an inevitable procedure fee. Every time you buy a building in Australia, lawyers are required to participate.
4. Mortgage broker fee
Generally speaking, paying for loans before buying an Australian property is unnecessary, but this may involve account opening costs and other related handling fees. Customers may opt for specific interest rates and expenses according to their needs and then choose the institutions they want to receive their loans from. The mortgage consultant will also give relevant professional advice.
5. Insurance
To prevent any damage and loss of property after buying an Australian home, the buyer can consider purchasing this insurance to ensure that the inside of the house is guaranteed. Management generally bears the cost of insurance outside the house, and the owner does not need to pay.
6. City capacity construction costs, sewerage costs, and land tax (council, water, and land tax rates)
Buying a house and townhouse in Australia will generally involve city capacity construction costs, sewerage costs and land taxes, usually charged quarterly. Generally speaking, a municipal fee is required every year after buying a property in Australia, especially a house, which can vary depending on the government. The landlord or agency generally pays the sewerage fee. The land tax is different according to the evaluation value of the land. If the buyer is overseas, there is an additional tax rate.
7. Body Corporate
Pay attention when buying buildings in Australia because apartments will charge property management fees. However, the land tax and municipal expenses of these types of properties are relatively low. The property management fee of Australia is collected according to the types of public facilities provided by the property. If the facilities are perfect and include things like a gym or swimming pool, these will be relatively high.
8. Property Management Fees
Allowing leasing agencies to take care of the property can effectively ensure collecting and paying various housing expenses. Even if the landlord is overseas, they are exempted from these worries after buying an Australian property. Generally, the management fee for a long-term rental ranges from 5.5% to 8.8% of the rent. The agency will give the owners a detailed list of expenditures to avoid confusion.
What are the specific processes for buying property in Australia?
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.
👉Website: investwithalison.com
👉Email: hello@investwithalison.com
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