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Three questions NZ citizens need to ask before Buying Property in QLD

The citizens of New Zealand currently living in Australia are not treated any differently than Australian permanent residents. And as such, they will receive the same kind of treatment from banks and lenders, and their property buying process is relatively simple. As a citizen of New Zealand can obtain a Special Category Visa SCV, it gives them similar borrowing rights as a permanent resident of Australia would get. New Zealand citizens living in Australia can also purchase any kind of property that their heart desires, including investment properties, old properties, new homes, or anything they want to live in. 

It is essential to note that since the citizens of New Zealand have a Special Category Visa Subclass 444, they do not need to apply for FIRB approval. Permanent Residents of NZ, however, will need to apply for approval for buying a house in Australia as a New Zealander. There are many variables to consider, such as Queensland property stamp duty, AFAD, and FHOG, so let’s get into it.  

What Happens If You Are An NZ, Currently Residing in NZ, But Buying Property in QLD? 

If you are a New Zealand citizen and you are buying a property in Queensland. In that case, you will probably be aware that you are not required to apply to the Foreign Investment Review Board (FIRB) for approval to buy a property because of reciprocal arrangements between Australia and NZ. 

New Zealand

However, you may not be aware that in some cases, you will be required to pay additional Transfer/ Stamp Duty (up to 7%). The rule is that if you are a New Zealand citizen residing in Australia and hold a special category visa under the Migration Act 1958 (which most New Zealanders’ do), then Additional Foreign acquirer duty ( “AFAD”) will not be payable. 

If you are a New Zealand citizen residing in New Zealand and enter into a contract to purchase land in Queensland, you will not be a holder of the special visa and, therefore, must pay AFAD. 

If your plan is to take a plane trip to sign the contract and avoid paying the duty, think again!  AFAD will also apply if the evidence indicates that the purpose of entry into Australia is to avoid paying AFAD by obtaining a special visa. 

We know it can get a little complicated if you are either buying a house in New Zealand from Australia or buying a house in Australia from New Zealand. So let us simplify things a bit.  

Temporary Residents of NZ 

au property

Suppose you are in New Zealand on a temporary Visa such as a 457 work visa, a temporary skill shortage visa, a student visa, or a spousal visa. In that case, you need FIRB approval to buy a property in Australia. Here are a few pointers to remember: 

  • You may only be allowed to buy one property in which you will live; however, you are required to sell it if you wish to not live there anymore. 
  • You are allowed to buy an investment property, but it must be either a new property or vacant land on which you would build a new property. 
  •  If you are buying a property with an Australian citizen as joint tenants or you’re in a spousal relationship, then it is possible that you don’t need FIRB approval. The same case does not apply to parents, children, siblings, friends, and relatives. Buying a house with a friend in NZ is also not an option.  

This begs the question: can NZ citizens buy property in Australia? The short answer is yes because they’re basically treated as PR holders in Australia.  

Foreign Investors 

If you are a foreign investor, you may need to keep the following in mind when you are considering a foreign investment in NZ property: 

investors
  • Approval from FIRB is required for your new property purchase. 
  • The property that you buy as an investment property must be either a new property or vacant land on which he will build a new property. 
  • If your purpose is investing, then you cannot buy an established property. 
  • Foreign investors in Australia can buy a property in their name and rent it out to their children on temporary visas in Australia. 

Exceptions for Foreign Citizens 

foreign citizens

You may be exempt from applying for FIRB approval if; 

  • The property in question has a developer who has obtained an exemption certificate for the property you are considering buying. 
  • The property was inherited by you.  
  • You were awarded the property by court order.  
  • You received the property in court in a divorce settlement.  

Top 3 Questions NZ Citizens Must Ask Before Buying Property in QLD 

It is natural to be confused when you are considering buying property in this state of Australia. You have questions; we have answers! Let’s get to them then.  But before we get started, here’s a short article on the specifics of the conveyancing process in Queensland.

Do NZ Citizens Need FIRB Approval? 

approval

In general, all overseas buyers that are hopeful to purchase property in Australia must begin by applying for FIRB approval. New Zealand citizens, however, are exempt from this rule when they are considering buying property in urban residential areas. 

If you are a New Zealand citizen that wishes to buy either rural or commercial properties in Australia, you will need to apply for a FIRB approval prior to purchasing the property itself.  

Should NZ Citizens Pay Additional Foreign Acquirer Duty in Australia? 

stamp duty

The government has imposed a stamp duty surcharge, also known as, Additional Foreign Acquirer Duty (or FAD), that foreigners must pay when considering buying property anywhere in Australia. This is an additional 7% on top of the property price that must be paid for properties in QLD.  

Suppose you are a New Zealand citizen who has just arrived in Australia; you will be granted a special visa known as Special Category Visa (subclass 444), as mentioned above. This is a specific kind of visa that grants you access to buying properties in Australia without having to pay FAD. That is if you are in Australia at the time of the settlement and paper signing as an intention of becoming a permanent resident in Australia.  

If you are a New Zealand citizen with the special category visa handling a transaction that involves an AFAD residential land, you will still not be liable to pay AFAD. Let’s take a look at a few examples to further clarify this.  

Example 1 

managing the taxes

You are a New Zealand citizen residing in Australia and are a holder of the special category visa when you enter a transaction revolving around AFAD land.  

You will not pay AFAD.  

Example 2 

You are a New Zealand Citizen that is residing in New Zealand when you enter a transaction for an AFAD residential land in QLD.  

AFAD will certainly apply because your special category visa does not fall under the Migration Act.  

Example 3 

calculating the taxes

You are a New Zealand Citizen that is currently living in New Zealand but entering Australia to obtain the special category visa to avoid paying AFAD.  

AFAD will apply if enough evidence is obtained by the Commissioner of State Revenue that shows that your primary reason for entering Australia was to obtain a special category visa to avoid paying AFAD. AFAD was introduced to make sure that foreign buyers of residential property can benefit from the government and the infrastructure that Australia has to offer to contribute to the economy similar to that of local buyers.  

Is FHOG Provided to New Zealand Citizens?

FHOG, also known as the Australian Government’s First Home Owner Grant, is available to PR holders, similar to if they were citizens of Australia. As you know, citizens of New Zealand, for all intents and purposes, are considered to be permanent residents of Australia. And as such, they do qualify for FHOG, given that they meet the eligibility criteria for it. 

first home owner grant
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