It is a widely held belief, that 457 visa holders in Australia can only apply for a home loan 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.
What type of property can a 457 visa holder buy?
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 Reveiw 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.
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.
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 the any restrictions applied by the Foreign Investment Revue Board are no longer valid.
So if you are considering the purchase or of a home to live in while in Australia on a 457 visa, using an Ocean Home Loans expert mortgage broker to assist you will certainly put you on the road to home ownership with the smallest possible deposit.