Many temporary residents are led to believe that a 457 visa home loan is only available for up to 80% of the value of the property, this is totally incorrect, there are a range of lenders who will lend up to 95% of the value of the property. You do not need to be married to, or in a de facto relationship with, an Australian citizen or permanent resident.
You will need to be able to fund the cost of Lenders Mortgage Insurance (LMI) which at a borrowing level of 95% could be approximately 3% of the funds borrowed, in addition to this you are not entitled to any exemptions to transfer duty or government fees and charges, nor are you eligible for any First Home Owner grants or incentives.
So you would be wise to consider saving in the region of between 11% to 13% of the purchase price of the property before applying for a 457 visa home loan.
What type of property can you purchase?
Temporary residents holding a 457 visa can buy one established dwelling only to live in (see below) and they may buy new dwellings, or vacant land to build new dwellings, because these latter purchases increase the available housing stock in Australia. You must apply with the Foreign Investment Review Board for permission to buy, this can only be done when you have found a suitable property and the permission is granted solely for that property, as your permission is for a specific property you should take legal advice on the content of your purchase contract from your lawyer or conveyancer.
A temporary resident is a person who is residing in Australia and:
- holds a temporary residency visa which permits them to stay in Australia for a continuous period of more than 12 months (regardless of how long remains on the visa);or
- has submitted an application for permanent residency and holds a bridging visa which permits them to stay in Australia until that application has been finalised
Established (Second-Hand) Dwellings
Temporary residents need to apply if they wish to buy an established dwelling. Temporary residents may acquire one established dwelling only and it must be used as their residence (home) in Australia. Such proposals normally meet with no foreign investment objections subject to conditions (such as, that the temporary resident sells the property when it ceases to be their residence).
Temporary residents are not permitted to buy established dwellings as investment properties.
New Dwellings
A ‘new dwelling’ is a dwelling which is being purchased directly from the developer and has not been previously occupied for more than 12 months in total. Temporary residents need to apply to buy new dwellings in Australia. Such proposals are normally approved without conditions.
Vacant Land
Temporary residents need to apply to buy vacant land for residential development. These applications are normally approved subject to conditions (such as, that ongoing construction begins within 24 months).
If you obtain permanent residency then any restrictions applied by the Foreign Investment Revue Board are no longer valid.
Apply for a 457 visa home loan
Need expert advice on a 457 visa home loan, then please contact us on 07 5593 1420 to talk with a mortgage broker who can give you that expert advice, or enquire online and we will contact you as soon as possible to discuss your options.
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