Australian expat home loans: buying while you live overseas

Your Australian passport does not guarantee that a lender will accept the application or count all of your salary. The way a lender converts and assesses overseas income can change how much you can borrow.

This guide is for Australian citizens buying in their own names. If you hold a visa or are buying with a non-citizen partner, use our visa home loan hub, mixed-visa couples guide or NZ citizen home loan guide.

Australian citizens are exempt from the residential foreign-investment approval requirement, including while living overseas. You can buy established or new residential property without a FIRB application. Our FIRB guide explains the separate position for other buyers.

For a purchase in your own name, Australian citizenship also matters for state foreign purchaser surcharges. Ordinary stamp duty still applies unless a concession or exemption covers you. Do not assume you qualify for an owner-occupier concession while living overseas. Occupation and timing conditions need checking.

A company, trust or foreign co-buyer can change the assessment. Ask your solicitor to confirm the actual owners before signing. Australian citizenship and Australian tax residency are different questions.

A lender may convert your salary to Australian dollars and count only part of it. This is often called income shading. The accepted currency, exchange rate, employment type, tax treatment and lender policy all affect the result.

Compare that assessment before comparing advertised interest rates. A lender with an attractive rate is no use if it will not accept your income or lend enough for the property.

The 60% and 80% figures below show how a change in the accepted income affects the starting calculation. They are not current policy quotes for a named bank. Ask the lender how it would assess your application.

That is a $40,000 difference in income before the lender applies its tax, spending, debt and repayment assessment. It does not translate directly into a particular loan amount. Exchange rates can also move before you transfer your deposit or settle.

It can help with some lenders, but check the policy before asking your employer to change anything. An AUD contract does not remove every overseas-income requirement, and a change in pay arrangements can have tax, employment and exchange-rate consequences.

The lender sets a maximum loan-to-value ratio, or LVR. This is the loan as a percentage of the property value it accepts. Overseas residence, income and the property can affect the limit. A lower valuation can also leave you needing more cash.

If the accepted LVR is 80% and the lender values a $750,000 home at the purchase price, the loan would be $600,000 and your contribution towards the price would be $150,000. Stamp duty, legal fees, other buying costs and a reserve are extra.

Use our deposit calculator, minimum deposit guide and LMI calculator for the budgeting steps. Our mortgage calculator estimates repayments once you have a loan amount to work with.

Equity can help provide security for a loan, but the lender still needs to be satisfied that you can repay it. If you own a property outright, that alone does not establish your borrowing capacity.

In a case like this, compare the income assessment, any acceptable rental income and a smaller loan amount. Expected rent also needs evidence and a lender allowance; it is not automatically counted in full.

Depending on the lender, overseas identity verification may involve an approved certifier, a notary, an Australian embassy or consulate, or an accepted remote process. Confirm the method before booking appointments or sending documents.

A power of attorney is one option when you cannot sign personally. It is not automatically required for every overseas buyer. Your solicitor should confirm the wording and witnessing, and the lender must accept its use.

Owning an Australian home does not by itself settle your tax residency. Ask a registered tax agent who works with expats about rental income, deductions, capital gains and what changes when you return.

If you later sell while a foreign resident for tax purposes, the main residence exemption can be restricted. Foreign resident capital gains withholding and clearance-certificate requirements also need checking. Citizenship alone does not decide those tax outcomes. Keep that advice separate from the lender’s income assessment.

Shortlist lenders that accept your country, currency and employment first, then compare the maximum loan, rate, fees and features. The lender will also need to know whether you are buying an investment or planning to live in the home, and when you expect to return to Australia.

Our lender review hub, CommBank review, Westpac review and ANZ review explain their products. Those reviews do not confirm that each lender accepts your particular expat application.

When contacting a lender or broker that accepts overseas-based borrowers, have your income currency, country of residence, deposit and target price ready. Hunter Galloway generally cannot assist while you are based outside Australia.

For more general information, read our visa home loan hub and mixed-visa couples guide. If you are moving back, our first home buyer guide explains the Australian buying process.

Client examples are based on real situations. Names and identifying details have been changed.