In short: An Australian citizen or permanent resident living overseas can buy or refinance Australian property without FIRB approval, but the lender pool narrows sharply. Expect a maximum LVR near 80%, foreign income discounted by roughly 20% to 40% before servicing, and full verification of overseas payslips and tax records. The bigger risk is tax: selling while a foreign resident can cost the entire main residence exemption.
Expats are often surprised that the hard part is not the loan. It is the sequencing of the loan, the tenancy and the eventual sale, and a decision made casually in year one can cost six figures in year six.
What changes when you move overseas
| Resident in Australia | Australian citizen living overseas | |
|---|---|---|
| FIRB approval needed | No | No |
| Can buy an established dwelling | Yes | Yes |
| Typical maximum LVR | Up to 95% with LMI | Commonly 80%, sometimes 70–75% depending on currency and country |
| Income treatment | Assessed in full | Foreign income commonly shaded 20–40%, then buffered |
| Lender choice | The full market | A small group of lenders and some non-banks |
| Main residence CGT exemption on sale | Available | Generally lost if you are a foreign resident for tax on the date of sale |
| Land tax | Ordinary rates, PPR exemption if you live there | Absentee or foreign owner surcharges may apply |
| Rental income tax | Ordinary rates with the tax-free threshold | Foreign resident rates from the first dollar, no tax-free threshold |
Note the distinction that trips people up: FIRB looks at citizenship and residency status for immigration purposes, while the ATO looks at tax residency, which is a separate test. You can be an Australian citizen and a foreign resident for tax at the same time. That combination is exactly where the CGT problem lives.
The capital gains tax trap
This is the single most important thing on this page.
Since changes that took effect in 2020, an individual who is a foreign resident for tax purposes at the time of the sale generally cannot claim the main residence exemption on an Australian dwelling, even for the years they actually lived in it. The test is applied at the date of the disposal contract, not across the ownership period. There is a limited exception for certain "life events" within a period of foreign residency of six years or less, such as a terminal illness, a death in the immediate family, or a divorce or separation.
Worked example
Sam bought a Melbourne house for $600,000 in 2016 and lived in it as their home until moving to Singapore in 2021. The house is now worth $1,050,000.
- Sells while still an Australian tax resident: the main residence exemption applies for the period it was their home, and the six-year absence rule can extend the exemption while it is rented. On these facts the capital gain could be nil.
- Sells as a foreign resident: the exemption is generally unavailable for the whole ownership period. The gross gain is $1,050,000 − $600,000 = $450,000, less costs. Foreign residents also do not get the 50% CGT discount for the period of foreign residency. Tax on a gain of that size, at foreign resident rates starting at 30% from the first dollar, can exceed $130,000.
The difference between those two outcomes is the timing of one contract date. If a sale is anywhere in your plans, get advice from an Australian tax agent before you list, not after. Confirm the current rules at ato.gov.au and read capital gains tax on property.
There is a second, separate trap: the foreign resident capital gains withholding regime requires a purchaser to withhold a percentage of the price and remit it to the ATO where the vendor is a foreign resident, unless a clearance certificate is produced. The rate and the property value threshold have both changed in recent years, so check the current settings before you sell.
How lenders assess expat income
- Currency. Most lenders publish a list of acceptable currencies. Widely traded currencies attract the lightest shading. Income in a currency the lender does not list is often a decline rather than a discount.
- Shading. A common approach is to convert the income at a conservative exchange rate, then count only 60% to 80% of it. Some lenders shade harder where the country has high income tax, on the reasoning that net income is lower.
- Employment type. A salaried role with a large, verifiable employer is straightforward. Self-employment overseas, contractor arrangements and income paid partly in allowances or housing benefits are harder, and allowances are often excluded.
- Verification. Expect to provide overseas payslips, an overseas tax assessment or equivalent, three to six months of overseas bank statements, an employment contract, and often a verification call to your employer's HR. Documents in another language need certified translation.
- Australian footprint. An Australian bank account, an Australian credit file and an Australian address history all help. If you left recently, apply while your Australian file is still fresh.
Because so much of this is policy rather than arithmetic, an expat application is one of the clearest cases for using a broker. Gorakh Timilsina assessed applications as a senior credit officer before founding GNT Finance, so we structure the file the way an assessor needs to read it and we know which questions get asked before they are asked.
Worked example: buying an investment property from overseas
Meera, an Australian citizen working in Dubai, buys a $700,000 townhouse in Melbourne's north as an investment.
- Deposit at 80% LVR: $140,000. Loan $560,000.
- Victorian land transfer duty at the general rate on $700,000: $2,870 + 6% of $570,000 = $37,070. No foreign purchaser surcharge, because she is a citizen and not a foreign person for duty purposes in most states. Confirm the position for your state.
- Conveyancing and searches: roughly $2,000.
- Total cash at settlement: roughly $179,000.
- Repayment on $560,000 over 30 years, for illustration at 6.50% p.a. (expat pricing typically sits above standard): about $3,540 a month.
- Rent at, say, $580 a week is $30,160 a year, or about $2,513 a month, so the property is negatively geared by roughly $1,000 a month before rates, insurance, management and maintenance.
- Tax: as a foreign resident she pays tax on the net Australian rental income from the first dollar, with no tax-free threshold, and cannot use the losses against foreign income.
That last line is why so many expat purchases that look fine on an Australian spreadsheet do not work in practice. Model the after-tax position with an Australian tax agent before you commit. Our investment property cashflow calculator handles the pre-tax side.
Refinancing from overseas
Refinancing as an expat is often easier than purchasing, because there is a repayment history on the existing loan and the LVR is usually well under 80%. It is worth doing if:
- You are on a rate set when you were resident and have not reviewed it since.
- Your loan is with a lender that has since tightened its expat policy — moving before you need to is easier than moving when you have to.
- You want to release equity for a further purchase while your income is verifiable.
Practical points: document signing from overseas usually needs either an Australian consular officer, a notary public, or the lender's accepted electronic signing platform. Build an extra two to three weeks into any timeline. See our refinancing service and the when to refinance guide.
Frequently asked questions
Do I need FIRB approval if I am an Australian citizen living overseas?
No. Australian citizens are not foreign persons under the foreign investment rules regardless of where they live, so no approval is needed and the ban on foreign purchases of established dwellings does not apply to you. Permanent residents are also outside it. If you are neither, see non-resident home loans.
What is the maximum I can borrow as an expat?
Commonly 80% of the property value, sometimes less depending on the currency, the country and whether the income is salaried. Some lenders will go higher with LMI, but the insurers apply their own expat rules and often decline. Plan on a 20% deposit plus costs, and treat anything better as a bonus.
Can I still get an offset account?
Usually yes, though not on every expat product. An offset is particularly useful for expats because it lets you park Australian rent and savings against the loan without making an irreversible repayment. Be careful about redraw instead of offset if the property may become an investment later, because redrawing for a private purpose breaks deductibility. See offset versus redraw.
Will my overseas credit history count in Australia?
Generally not. Australian credit reporting does not import overseas files, so a strong credit record abroad does not carry across, and a thin Australian file can hurt. If you still hold an Australian credit card or loan, keeping it open and in good order maintains an Australian file. Read credit score and home loans.
Should I keep my old home or sell it before I leave?
That is a tax and financial planning question, not a lending one, and the CGT position described above usually dominates the answer. The six-year absence rule can preserve the main residence exemption while a former home is rented, but only if you are still an Australian tax resident when you sell. Get advice from an Australian tax agent before you leave, not after.
Can I use my overseas superannuation or pension as income?
Rarely on its own. Most lenders want employment or business income for servicing. Some will accept a documented, ongoing overseas pension, generally shaded. Overseas retirement savings held in a fund are usually treated as an asset rather than income, which helps the deposit but not the servicing calculation.
Talk to GNT Finance
Time zones are not an obstacle. GNT Finance works with Australians in Asia, the Gulf, the United Kingdom and North America by video and e-signature, and will tell you early whether your income profile is financeable and what the tax sequencing should look like. Consultations in English, Nepali or Hindi, with an interpreter in your language on request. Book a free consultation or call 0426 403 703.
This page is general information only and not legal, tax or financial advice. Tax residency and capital gains rules are complex and change — confirm your position with the Australian Taxation Office or a registered tax agent.
Written by Gorakh Timilsina
Founder, CEO & Senior Mortgage Consultant at GNT Finance. Gorakh started as a broker assistant, spent years as a senior credit officer assessing loan applications, and now helps Melbourne families get the right loan approved. English, Nepali and Hindi spoken.