How Your Residency Status Affects Your Ability to Purchase Property in Queensland?
We commonly talk to buyers who have different residency statuses in Queensland. Some are outside of Australia who want to invest in the Australian market. Some are temporary residents of Australia, looking to find a place to call their own while they live here. Some are Australian Citizens or Australian Permanent Residents looking for their new home. It can surprise anybody who is not an Australian Citizen what information they must disclose to whom and restrictions as to what properties they can purchase. In this article, we will explain what type of property you can purchase and what taxes you may have to pay, depending on your residency status.
1. Australian Citizen
If you are an Australian Citizen then, you can purchase any property in Queensland, a property already built, an off-the-plan development property and vacant land. An Australian Citizen will have to pay standard transfer duty on the Contract, which is calculated depending on whether the property will be a Principal Place of Residence or an Investment Property.
Australian Citizens may also be eligible to claim the First Home Owners’ Grant from the Queensland Revenue Office and there are more conditions you must meet in order to qualify for the Grant.
2. Australian Permanent Resident
If you are an Australian Permanent Resident then, like an Australian Citizen, you can purchase any property in Queensland. Your liability for paying transfer duty is the same as an Australian Citizen. However, an Australian Permanent Resident will be required to complete an Identity Details Annexure Form with each property they purchase. This is a Form that discloses information such as where the Permanent Resident was born, their country of residence for tax purposes and visa information, so the Revenue Office can ensure the Permanent Resident has the appropriate Visa.
Australian Permanent Residents may also be eligible to claim the First Home Owners’ Grant from the Queensland Revenue Office and there are more conditions you must meet in order to qualify for the Grant.
3. Australian Temporary Resident
If you are an Australian Temporary Resident, then you can purchase one property in Queensland to claim as your Principal Place of Residence. However, only some temporary residents are eligible for this purchase. These are the temporary residents who hold a temporary visa that allows the person to remain in Australia for a continuous period of 12 months, or a person has submitted an application for an Australian permanent visa and are currently holding a bridging visa that allows the person to stay in Australia until the permanent residency application is finalised.
In relation to the property, it can be:
- an already established dwelling, a property that is already built;
- an unoccupied new dwelling, that is a property that has been newly built and not previously occupied or if it was built as part of a development and sold by the developer, the property had not been previously occupied for more than 12 months; or
- vacant land, if the land will be used to construct a residential property within 4 years of FIRB approval.
While an Australian Temporary Resident is allowed to purchase one established building, it must be the person’s principal place of residence, which means they will be:
- living in the property as the main place of residence for a continuous period of at least 12 months within 12 months of the contract settling;
- every part of the property will not be rented at all (this is different to an Australian permanent resident who is given a 6 month grace period, if the tenant was listed on the contract); and
- if the property will no longer be the resident’s principal place of residence, they sell the property within 3 months.
It is crucial that the property will be the resident’s principal place of residence, if the property will be an investment property for the resident, they will be treated as if they are a foreign person of Australia and can only purchase New Dwellings.
If the temporary resident meets the above requirements and wishes to enter into a Contract, they should be aware of the fees they will pay. In addition to paying the same costs that an Australian Citizen/Permanent Resident would, the Temporary Resident will have to submit an application to the Foreign Investment Review Board to purchase the property (and pay the applicable application fee). A Temporary Resident must also pay Additional Foreigner Acquirers Duty, which is payable at the same time the buyer pays Transfer Duty and will be 7% of the Contract Purchase Price.
4. Foreign Person
If a person does not meet any of the above requirements, then they are considered a foreign person. A foreign person to Australia is restricted to purchasing only New Dwellings in Queensland. A New Dwelling is a piece of residential land which had not previously been sold as a dwelling and now has:
- a dwelling built that had not been previously occupied; or
- if the dwelling is part of a development (of at least 40 dwellings), was sold by the developer and had not been previously occupied for more than 12 months.
The good news is that a foreign person is not restricted on how many New Dwellings they may purchase in their lifetime. Anybody (permanent, temporary or foreign) can purchase as many New Dwellings as they wish.
If a foreign person (or temporary resident) is going to purchase a New Dwelling, they may need to apply to the Foreign Investment Review Board for approval, the only exception to this is if the Developer holds a Foreign Investment Review Board Exemption Certificate for the development. Regardless of whether the buyer needs to apply to the Foreign Investment Review Board, or an Exemption Certificate had been obtained, the buyer will have to pay the applicable Foreign Investment Review Board Fee and Additional Foreigner Acquirers Duty.
5. Contract Conditions & Foreign Investment Review Board Approval
Most off the plan development contracts will include a condition that the buyer must obtain Foreign Investment Review Board Approval. Where the problem is found is when a temporary resident is looking to purchase an Established Dwelling, as current contracts automatically presume the buyer is an Australian Citizen or Permanent Resident of Australia. Accordingly, a special condition should be inserted into these contracts, making the Contract subject to the buyer obtaining Foreign Investment Review Board Approval to purchase the property.
If you have any questions or require assistance with a conveyancing matter in Queensland, then please contact the property team at My Property Protect for more information.
Kayleigh Swift, Associate
Kayleigh Swift is an associate in our Commercial and Property team who assists with Employment Law matters. With a high level of experience in commercial and retail leasing, voluntary and involuntary purchase and sale acquisitions, property development and employee relations, Kayleigh provides practical advice to ensure smooth business transactions.
Chloe Skubis, Lawyer
Chloe Skubis is a Lawyer in our Property team who assists with various conveyancing transactions. Chloe is very experienced in residential conveyancing and is a problem solver. She always provides efficient service to all her clients.