Investing in Australian property has become very popular not only amongst overseas investors but also among Australia expats wanting a slice of real estate in the country. This demand has been fuelled by many factors.
First, about 70 per cent of Australian households are homeowners. Hence the real estate market is stable with very little speculative trends. Second, in most capital cities in the country, there has been a consistent under-supply of housing. Australia has enacted legislation that ensures prudent lending and economic management thereby eliminating the risk of asset price bubbles. Finally, the country has never seen a crash in the real estate market of more than 20 per cent in a year unlike some of the major markets around the world like the USA or Hong Kong.
Legislation prevalent in various States governs property law in Australia. There are two aspects here – one is the Legislation regarding property, and the other is legislation regarding title to the property. Here are some examples of what is prevailing in some of the States in Australia. In New South Wales, it is Real Property Act 1900 and the Conveyancing Act 1919 respectively, in Victoria, it is the Property Law Act 1958 and Sale of Land Act 1962, and in South Australia, it is the Law of Property Act 1936 and Real Property Act 1856. The Australian Capital Territory has the Civil Law (Property) Act 2006 and Civil Law (Sale of Residential Property) Act 2003.
To get detailed information on the statutory regulations and laws related to property in the other States in Australia visit website of the local governing councils or a property law firm of that State.
Cost of buying property in Australia is about 5 per cent of the value of the property. However, you should make provision as follows –
Legal fees, from 4800 to $2000, Loan establishment fees (depending on the lender) from $0 to $895, Property inspection fees usually not exceeding $800 inclusive of the building, pest and strata inspection
Apart from these expenses, a significant chunk goes into stamp duty. This is the component of State Government taxes and varies between States. FIRB approval fees, buyer’s agent fees and other minor expenses round off the cost of buying property in Australia.
After the stamp duty levy was introduced in 2016, the Government has levied additional taxes and duties on foreign buyers investing in real estate in Australia.
Finally, do not forget the Ghost Tax. It is a minimum $5000 per year levy on property that is not fully occupied or leased out for more than six months in a year.