Investing from Overseas

[JohnK]

Hi all,

I have a cousin in canada who is keen and comtemplating on investing in the qld residential property market.
Just want to know - what steps would he or she need to take before taking the plunge?

Thanks in advance.

 

[Lilith]

http://www.apm.com.au/osbuyers/buying.htm

This is a good start.

Cheers

 

[JohnK]

Thanks Lith.

Are there any complications involved if you were to invest from overseas? in areas such as tax, financing or legal?

Example: Can they negative gear property the same way a local investor does?

Cheers for the help.

 

[geoffw]

Thanks Lith.

Are there any complications involved if you were to invest from overseas? in areas such as tax, financing or legal?

Example: Can they negative gear property the same way a local investor does?

Cheers for the help.

Negative gearing would probably depend on the laws of the country the people are normally taxed under. I would assume that this would be Canada- though I guess it's possible that if it was positively geared high enough, so that their income exceeded the taxable threshold, they may be also subject to Australian tax.

When I was in Australia with a property in England, the Australian laws would not let me claim losses against Australian income. So your cosuin should really be getting advice from an Canadian accountant, preferably with experience of investing in other countries (which would probably be common in Canada). They might also check out other local online resources.

I'm not sure about financing- a Canadian institution would probably not accept an Australian security, but I don't know how they might go getting finance here.

 

[JohnK]

Thanks guys.

 

[Lilith]

I am not sure about the Canadian law, but American law allows citizens and residents to own foreign real estate (vacation home) and deduct mortgage interest from taxable income. You can still negatively gear your property in Australia as an overseas investor as far as Australian taxation is concerned.

Borrowing from Oz banks is not a problem if you put enough down (20% minimum of the bank's valuation). The real hassle is not in financing or taxation, but in the choice of properties you are allowed to buy. An overseas investor faces a lot more restrictions in what he can buy, the FIRB gives a pretty detailed account of realty properties open to foreign investors.

http://www.firb.gov.au/content/default.asp

Hope that helps.

 

[JohnK]

Love the work around this place.

Thanks again!