Buying Land to Build a House as an Expat: Everything You Need to Know
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Key Takeaways:
- Australian citizens living overseas can buy land and build a house in Australia.
- This also applies to permanent residents of Australia when living in other countries.
- Purchase a land and building package to build a brand new home.
- Construction loans can pay instalments at each stage of the build.
- You only pay interest on the instalments you have received.
Did you know it can be cheaper to buy land and build a home, rather than buy an existing home? Expats across the globe are taking advantage of Australia’s fast-moving property market and investing in their homeland!
Read on to discover everything you need to know as an Expat when buying land and building your own property.
Can Expats Buy Land and Build a House in Australia?
Australian Expats can buy property in Australia! Even when you are living overseas, you can still invest in the Aussie property market. Providing you have Australian citizenship or permanent residency, there are minimal extra hurdles to jump!
Citizens of New Zealand also have the same privilege to easily invest in the Australian property market.
Whilst the process is similar to Aussies living at home, remote purchases can be difficult even for a seasoned investor. Ask Odin Mortgage to take care of your Expat home loan purchase, wherever you are in the world!
Get a free Australian mortgage assessment today.
How to Buy Land and Build a House as an Expat
Purchasing vacant land and building a house is fast becoming popular with Aussie Expats looking to invest in their homeland! You can design a brand new home in a perfect location, often for a lower price than buying an existing home.
Follow these simple steps to buy vacant land, and then build a house!
1. What Are Your Aims?
Decide what you are trying to do with your land and building purchase. Is this a clear investment, or will you want to live in the house in the future? Your aims will dictate what type of land and building purchase you buy.
2. Set Your Boundaries
How much can you spend on your land and building purchase? How much deposit can you afford? Set a limit that you can comfortably put down as a deposit and how much you can afford to pay monthly. Remember to include any applicable fees, such as stamp duty and conveyancing fees.
Once you have set your boundaries, make sure you stick to them! Spending too much money and borrowing too much from a lender is not a wise move. You may find yourself struggling to pay back the loan repayments and may face the risk of defaulting on the loan.
Contacting a lender is advisable in the early stages to get an idea of how much you could borrow.
3. Find a Block of Land
The next step to take is to discover a vacant block of land in a perfect location. If you are purchasing this land as an investment, look for up-and-coming areas. Choose an area where capital growth is predicted and where amenities are close by.
Are you aiming to live in the property in the short-term, or in several years’ time? Then choose a location that you will love! Does the location have an idyllic view or is it in the centre of a bustling lifestyle and nightlife? What services are available in the area?
4. Check Out Zoning
The zoning of the area is vitally important and is sometimes overlooked. The location’s zoning will dictate what types of construction are allowed on the land.
Zoning restrictions may change in the future, so you should examine the area’s present and future status.
5. Assess Qualities of the Land
What type of terrain does the land possess? Is the land flat, sloped, or hilly? Is the land vulnerable to flooding or bush fires?
Assess the qualities of the land you wish to purchase to determine whether it is the best block to buy. This will prevent unexpected expenses from appearing after the purchase.
6. Design Your Home
Once you are certain what size of land you are buying, it is time to design your dream home! Seek the help of a qualified designer to create the layout and design features you want.
Consider the type of materials you want the property to be built with along with your desired floor plan.
7. Paperwork
Once you have found the perfect vacant land and decided on your home design, you must go through the necessary paperwork. A building contract must be created to agree with your construction team on what you expect from them.
Working with a legal professional is the best way to complete this step. Make sure nothing is left out of the paperwork!
You will also need to arrange your finance for the purchase if required. You may be able to get a construction loan to finance your purchase, or look for land packages.
This involves finance for the land and then instalments of finance for each stage of the building costs. Combine the instalments into your build contract so the construction team can estimate how much is required for each stage.
8. Construction
Once the land is officially yours, it is time for construction to begin. You may employ a project manager to oversee the construction and ensure that milestones are met effectively.
Finance will be released from the lender at each relevant construction stage. This home loan method is perfect for building a property as you only pay interest in the instalments released. Your repayments will gradually increase with each stage of the construction.
Get a free Australian mortgage assessment today.
Is it Easy for Expats to Buy Land and Build a House?
The process to buy land and build a house is straightforward enough if you are living in Australia. Although, if you are living overseas on foreign assignments, liaising with various parties can be confusing and may cause delays.
Seeking expert advice from Odin Mortgage will enable a smooth home loan purchase for Expats. We will take care of the process from start to finish, keeping you constantly updated! We can also help Expats to refinance at a lower rate.
Can Expats Apply for a Mortgage?
Yes, you can apply for a mortgage with Odin Mortgage as an Expat! The process is simple and straightforward as we act as the liaison between you and the other parties involved. Your location is not an issue!
Whatever your overseas assignments and the new country you reside in, we can help you today! Check out Australia’s housing market report for the latest lowdown on property trends in Australia!
How Much Can I Borrow as an Expat?
Your borrowing power will depend on your own personal circumstances, but you are not at a disadvantage as an Expat. Your borrowing is not affected by the current country you reside in or the duration of your international assignments. However, the average home loan amount in Australia is currently $578,335.
Although, the lower the amount you need to borrow, the easier it is to get a mortgage approved! Although you can still apply for up to 95% of the property value price if desired.
It is recommended to place a limit on the amount you borrow to avoid Lender’s Mortgage Insurance. If you borrow more than 80% of the property’s value, you will have to pay LMI to cover the interests of the lender. This is an additional cost for you to consider.
Check out the latest Q4 2021 mortgage rates whether you are an owner-occupier or investor! You can view the best deals from CBA, ANZ, NAB, and Westpac!
Which Currencies Are Accepted?
All currencies are considered when applying for a mortgage as an Expat. Your currency will be converted into Australian dollars at a set exchange rate.
You will need to prove your income with evidence such as regular payslips and a contract of employment, however. Visit Odin Mortage’s FAQs for the latest advice and guidance.
Can Self-Employed Expats Apply For a Mortgage?
Self-employed Expats are very welcome to apply for a mortgage, although some lenders will accept full-time employment only.
The team at Odin Mortgage are experts in finding the best mortgage for you and your particular circumstances. Being self-employed certainly is a challenge in finding a great loan deal. But we can target the best lenders who we know will likely accept your application!
Can Expats Receive Any Grants?
Australian Expats may be able to receive the First Home Owners Grant when building a new property. However, you must move into the property as your primary residence within 12 months of the building completion.
Why Do Expats Want to Buy Land and Build a House?
Most Expats or migrant workers will want to purchase land and build a property in their home country for future repatriation. Expats may move to their host country on an overseas assignment to further career development.
International posts may be temporary and so expatriate employees will eventually leave the Expat community and return to their home country. Living in a foreign country offers a superb overseas experience that expatriates love!
If you remain an Australian citizen or permanent resident, it is relevantly easy to buy land and build a home in Australia. Buying a home in a foreign country if staying for an extended period means you are a foreign buyer living abroad.
Get a free Australian mortgage assessment today.
Can Foreigners Buy Property in Australia?
Whilst foreigners can purchase Australian property, there are additional requirements to meet. This is relevant to individuals who do not possess Australian citizenship or permanent residency.
The Foreign Investment Review Board must give you permission to buy property in Australia. You can usually only buy new properties or vacant land and must meet a criterion that satisfies the FIRB.
What is the Foreign Investment Review Board?
As a federal government organisation, the FIRB’s role is to manage the volume of foreign investment in Australia.
Foreign investment can be great for the country and can open up new job opportunities. However, too much foreign investment can saturate the Australian property market and limit purchase opportunities for citizens, residents, and local employees.
The purpose of the FIRB is to balance the interests overall of Australians, investors, the local economy, and the property market.
As a foreign investor, you will have to consider the FIRB application fee in your finances. The typical fee for property or land valued under $1,000,000 is currently $6,350, although this can rise substantially.
However, a rule breach set by the FIRB could result in a significant reprimand. This includes a colossal fine of up to $3,300,000 or a prison term of up to 10 years.
Foreign buyers will also have to pay additional stamp duty called the Foreign Buyer Stamp Duty surcharge. The amount varies from state and territory, although is usually an extra 7% or 8% of the property value. This applies to joint buyers where one buyer is an Australian citizen and one buyer is a foreign buyer.
Pros and Cons of Buying Land and Building a House as an Expat
Are you considering buying land and building a brand new home? Here are the pros and cons that every Expat should think about before taking the plunge with a new purchase!
Pros
- You can choose the exact location and size of the land.
- Design the perfect floor plan to suit you!
- May be able to achieve idyllic views in the countryside.
- Tailored construction loans to meet the construction plan.
- No renovation as everything in the house is new!
- You may be able to receive the First Home Owners Grant if eligible.
- Pay stamp duty on the land’s value, not the new build house.
- Lower costs overall!
Cons
- May take longer to build a house than to purchase an existing home.
- Location may be set far away from bigger cities.
- Some lenders ask for a larger loan for construction loan approval.
- Costs may be more expensive than planned.
Let Odin Mortgage Help You With Your Land and Build Purchase!
The professionals at Odin Mortgage are waiting for your call! We can help all Expats, wherever your location, to finance your property purchase. We will tailor your purchase to meet your needs and find you the best deals available!
Call Odin Mortgage today and discuss your requirements with an expert broker!
Frequently Asked Questions
I am currently living and working in Europe. Can I purchase a property back home in Australia?
Yes, as long as you are still an Australian citizen or permanent resident, you can purchase a property in Australia. The process is very much the same as if you were living in Australia. You need to evidence your identity and income and apply for a home loan.
Odin Mortgage are expert brokers who can help you secure the best loan for your circumstances!
How much are Odin Mortgage’s fees?
Odin Mortgage is free for you to use as we receive the fee from the lender! We receive a fee from the lender based on the terms and amount of your secured loan. Review Odin Mortgage’s FAQs for further information.
How can I apply for a home loan with Odin Mortgage?
Visit Odin Mortgage today and simply provide the following information:
- Your income
- Your employment details
- Assets such as properties and savings
- Liabilities such as debts you owe
The initial internal assessment will not affect your credit rating. We will provide you with a range of suitable loan products and lenders, recommending the best options.
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