Reviewed by Tan Chua
Many families buy or sell Melbourne property while living in Shanghai, Hong Kong, Taipei, Kuala Lumpur or Singapore. The process can work smoothly from overseas. But the rules for foreign and overseas owners are different, and mistakes are often expensive.
Chua Tan Associates acts only on property located in Victoria, Australia. Our clients may live anywhere in the world.
This guide explains the main issues in general terms. The rules change often and depend on your circumstances, so please obtain advice before you sign anything.
Do You Need FIRB Approval Before Signing?
The Foreign Investment Review Board (FIRB) advises the Australian Government on foreign investment. Many foreign persons must obtain approval before buying residential land in Australia.
“Foreign person” has a technical meaning. It can include non-citizens living overseas, some temporary visa holders, and companies or trusts with foreign interests. Australian citizens living overseas are usually treated differently.
The type of property matters. Rules for new dwellings, vacant land and established dwellings differ. The Government has also restricted foreign purchases of established dwellings in recent years.
Timing is critical. A contract should usually be conditional on FIRB approval, or approval should be obtained before signing. Buying without required approval can lead to serious penalties and forced sale.
Foreign Purchaser Additional Duty (Victoria)
Victoria charges ordinary stamp duty on most property purchases. Foreign purchasers of residential property usually pay an extra amount, called foreign purchaser additional duty.
This duty can apply to foreign individuals, foreign corporations and foreign trusts. A trust may be “foreign” because of who its beneficiaries are, even if the trustee is in Australia.
Some exemptions and concessions exist. These depend on factors such as residency status, the type of property and how the purchase is structured. Each case must be checked against the current law before signing.
The Absentee Owner Surcharge on Land Tax
Victorian land tax is charged each year on land you own. Owners who are “absentee” persons usually pay an additional surcharge on top of ordinary land tax.
An absentee individual is generally a person who is not an Australian citizen or permanent resident and does not ordinarily live in Australia. Absentee corporations and absentee trusts are also caught.
This is an ongoing yearly cost, not a one-off. Owners must also notify the State Revenue Office of their absentee status. Vacant residential property may attract further tax as well.
Selling: Foreign Resident Withholding and the Clearance Certificate
When a Victorian property is sold, the buyer may have to withhold part of the price and pay it to the Australian Taxation Office (ATO). This is called foreign resident capital gains withholding.
Australian resident sellers can avoid this by obtaining an ATO clearance certificate before settlement. In practice, every Victorian seller should check this early. Without the certificate, money may be withheld from the sale proceeds.
Foreign resident sellers cannot obtain a clearance certificate. They may be able to apply to vary the withholding amount. Australian tax residency is a technical test and is not the same as citizenship.
Signing Contracts, Transfers and Powers of Attorney from Overseas
You do not usually need to fly to Melbourne. Many contracts can be signed electronically. Most Victorian transfers are now lodged online through an electronic settlement platform.
Your lawyer must verify your identity before acting on a transfer. Doing this from overseas needs care. The method depends on where you live and which documents you hold.
Some documents must be signed before a qualified witness. Overseas, this may be a notary public or an Australian consulate. Some countries also require an apostille or legalisation, so the document is accepted in Victoria.
A Victorian power of attorney can let a trusted person sign for you. It must be prepared and witnessed correctly. A document valid in your home country may not work in Victoria.
Chua Tan Associates has a notary public in-house. This helps when documents travel in both directions between Australia and Asia.
Funds Coming from Overseas
Banks and law firms in Australia must check where your money comes from. Expect questions about source of funds and source of wealth.
Your home country may also have currency controls. These can delay transfers if not planned early. A late deposit or settlement payment can put you in breach of contract.
Keep clear records of salaries, business income, gifts from family and asset sales. Good records make bank checks faster.
Plan Your Structure Before You Sign
You can buy as an individual, jointly, through a company or through a trust. Each choice affects duty, land tax, income tax, privacy and succession.
Changing ownership after settlement can trigger duty again. It is usually far better to choose the right structure first. Foreign status may also affect a company or trust in ways families do not expect.
Think about who should own the property in ten or twenty years. Your Victorian Will and any trust deed should match your plans.
Illustrative example, not a real case: A parent in Asia plans to buy a Melbourne apartment for a child studying here. The family first considers buying in the child’s name. Advice on FIRB, duty, land tax and future succession leads them to compare several structures before signing.
Common Concerns of Asian Families
“We live overseas. Can we do everything without coming to Melbourne?” Usually yes. We work online across time zones and guide you through overseas signing and witnessing.
“We don’t understand Australian law. How do we avoid costly mistakes?” We explain each step in plain language before you commit. Most expensive mistakes happen before signing, not after.
“The bank keeps asking where our money came from. Is something wrong?” No. These checks are standard. We help you understand what is likely to be asked and prepare in advance.
“We want to keep our family affairs private.” We treat every matter with discretion. Structure choices can also affect what information becomes public.
“Can one firm also handle Wills, family and visa questions?” Yes. Property, Wills and estates, family law and immigration often connect. One firm sees the whole picture.
Why Asian Families Choose Chua Tan Associates
Our lawyer Tan Chua has more than three decades of experience in Victorian property law. That depth matters when foreign buyer rules, duty and tax issues overlap in one transaction.
The real value of good advice is the costly mistake you avoid. A wrong structure, a missing approval or an invalid signature can cost far more than careful planning.
- Family firm practising in Melbourne since 1990
- Extensive cross-border experience with Greater China and South-East Asia
- One firm for property, Wills and estates, family law and immigration
- We speak Mandarin, Cantonese and English
- Notary public in-house
- Discreet and confidential service
Frequently Asked Questions
Do you act on property outside Victoria? No. We act only on property located in Victoria. Our clients may live anywhere.
Does an Australian citizen living overseas need FIRB approval? Usually not, but tax and duty consequences may still arise. Your own situation should be checked.
Can I sign the contract before FIRB approval? Sometimes, if the contract is properly conditional. This must be drafted carefully before you sign.
Do I need a clearance certificate if I live in Australia? Generally, a resident seller should obtain one before settlement. Otherwise part of the price may be withheld.
Can a family member in Melbourne sign for me? Yes, with a valid Victorian power of attorney. It must be prepared and witnessed correctly.
See all our Melbourne property and conveyancing services.
Book a Consultation
If you are buying or selling Victorian property from overseas, speak with us before you sign. We offer a paid initial consultation. You and family members overseas can join online.
Once we understand your matter, we will provide a quote for the work.
預約諮詢
This article is general information only. It is not legal or tax advice, and you should not rely on it. Please obtain advice about your own circumstances before acting.
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