Financing Your Overseas Property
Explore your options for funding international property purchases, from Australian equity release to overseas mortgages and developer financing.
Financing Options for Australians
Buying property overseas as an Australian requires creative financing. Most Australian banks won't lend for foreign property, but you have several viable alternatives.
The simplest option. Use savings, investments, or proceeds from asset sales.
Borrow against your Australian property to fund overseas purchase.
Finance through banks in the country where you're buying.
Financing Methods Explained
If you own property in Australia with equity, you can refinance or take out a home equity loan to access cash for your overseas purchase. This is often the most accessible option for Australians.
Advantages
- Access to Australian lending rates (typically lower)
- Familiar banking relationship
- No foreign bank approval needed
- Can borrow up to 80% LVR (Loan-to-Value Ratio)
Disadvantages
- Puts your Australian home at risk
- Currency risk (AUD vs foreign currency)
- Requires existing Australian property equity
- Interest not tax-deductible in Australia
Important Consideration
Interest on loans for overseas property investment is generally NOT tax-deductible in Australia. Consult with an accountant before proceeding.
Some countries allow foreigners to obtain mortgages from local banks. Requirements and availability vary significantly by country.
Thailand
- Some banks offer mortgages to foreigners
- Typically 40-50% LVR maximum
- Higher interest rates than locals
- Requires proof of income and Thai bank account
Dubai (UAE)
- International banks (HSBC, Citibank) offer mortgages
- 40% deposit required for non-residents
- Proof of income and employment required
- Competitive rates available
Europe (Greece, Spain, Portugal)
- Mortgages available to non-residents
- 30-40% deposit typical
- Complex documentation requirements
- May require local tax number and bank account
Bali & Japan
- Bali: Mortgages not typically available to foreigners
- Japan: Very difficult for non-residents
- Cash purchases or equity release recommended
Many developers, particularly in Dubai, offer flexible payment plans that spread the cost over the construction period.
Advantages
- Low upfront deposit (10%)
- Spread payments over 2-4 years
- No interest charged
- No bank approval needed
Risks
- Developer risk (project delays or cancellation)
- Must have funds ready for final payment
- Off-plan risks (property may differ from plans)
Some international banks offer mortgages to Australian clients for overseas property purchases, particularly if you have existing banking relationships.
- HSBC: Offers international mortgages in select markets
- Citibank: International mortgage products available
- Typically requires significant income and assets
- Higher minimum loan amounts
Tax Considerations for Australians
Important: Seek Professional Advice
Tax implications of overseas property ownership are complex and vary based on your individual circumstances. The information below is general only. You MUST consult with a qualified accountant or tax advisor before making any decisions.
As an Australian tax resident, you must declare all worldwide income to the ATO, including rental income from overseas properties.
- Rental income is taxable in Australia
- May also be taxable in the country where property is located
- Foreign tax credits may apply to avoid double taxation
When you sell your overseas property, capital gains are generally taxable in Australia.
- CGT applies to overseas property sales
- Currency fluctuations can affect your gain/loss
- 50% CGT discount may apply if held >12 months
Interest on loans for overseas investment properties may not be tax-deductible in Australia.
- Generally NOT deductible if borrowing against Australian property
- Complex rules apply, seek professional advice
Currency fluctuations can significantly impact your returns.
- AUD/foreign currency movements affect your investment value
- Gains/losses from FX are taxable events