Australian Real Estate – Processes to Understand

Until now, Australian real estate has always been considered a lucrative market for investors thanks to its profitability and stability due to transparent legal ownership and good investment policies,… 

However, successful real estate investment still requires considering many factors such as project overview, investor or future price increase potential. In addition, understanding the process, relevant taxes and fees in the host country is also a deciding factor in the success of investing here. 

That is why we have gathered the process of owning real estate in Australia in the article below for your reference.

1. Australian Real Estate Investment – Potential and permanent ownership for Vietnamese people 

Growth rate Fast economic growth and Australian real estate market with the second highest transparency in the world. The value in the industry is estimated to increase steadily (from 7-10% per year), especially in Sydney city. This helps investors feel completely secure about the ability to preserve capital, avoid inflation and sustainability in the future.

In addition, Australia’s population is growing rapidly, it is predicted that by 2023 there will be up to 620,000 households in need of housing. This is a factor contributing to boosting real estate market prices here.

The country’s laws allow foreigners to own real estate permanently. Good educational environment, peaceful life, fresh climate,… That’s why Australia has become the preferred choice for people who want to buy real estate outside of Vietnam.

2. The process of buying Australian real estate should be clearly understood

Step 1: Learn about borrowing capacity and budget

In case the customer does not have enough finances, the real estate consulting company will assist the customer in finding a lender to complete the application procedures according to regulatory requirements (note that for some projects, the investor will lend directly to the customer.)

Step 2: Research the market and choose a suitable real estate product

This includes the following activities: Searching and researching the Australian real estate market, reviewing project details (location, price, surrounding amenities and legal regulations). You can learn through real estate websites or get advice from experts. 

Step 3: Deposit and apply for FIRB investment license

In this step, the customer will deposit an amount of about 1000 AUD – 20,000 AUD (depending on the property) to sign the deposit agreement. This amount is kept in the company’s trust account (trust account) which is audited annually, and will be refunded if the buyer changes his mind. Depending on the value of each real estate, the process of applying for a FIRB investment license will usually take about 2 weeks for approval. 

Step 4: Review the contract with the buyer’s attorney

After 5 working days, the investor’s lawyer will send the sales contract to the buyer’s representative lawyer. The buyer’s attorney and the buyer arrange a time to review the contract and its detailed terms. 

Step 5: Sign the contract and pay 10%

After successful negotiation, customers will be instructed to sign a contract and pay a 10% deposit (including previous booking costs). 

Note: 10% of this deposit will be transferred to a trust account controlled by the investor’s lawyer. Investors and lawyers do not have the right to use this money. This amount will be refunded 100% if the investor does not complete the contract as stated in the contract. 

Step 6: Pay registration fee (stamp duty) 

In each state, registration fees will be different. Below is the estimated registration tax for foreigners by state: 

• Sydney: 4% (stamp duty NSW) + 8% (surcharge stamp duty) = 12%
• Melbourne: 5.5% (stamp duty VIC) + 8% (surcharge stamp duty) = 13.5%
• Remaining states: Stamp duty by state + 7% (surcharge stamp duty)

Step 7: Check and receive the house 

The buyer’s lawyer will update and notify the buyer of appropriate time to prepare finances (3-6 months before project handover). Customers pay the remaining 90% and receive the house. 

Within 90 days from the date of handover. If any problem occurs with the infrastructure, the investor is responsible for repairing it. 

Above is the entire process when buying and selling real estate in Australia. If you intend to invest or are still hesitant, let M.A.P help you. M.A.P owns a team of professional, experienced staff with high enthusiasm, ready to serve you in Vietnam. We will work directly with customers and investors in Vietnam to understand their needs, thereby devising appropriate strategies to support customers in achieving their goals effectively.