50/50 loan with Foreign buyer (NZ)

Hi all,

Wondering what lenders are still open to
Taking on loans to New Zealand citizens, and what sort of LVRs?

Scenario is I’m a resident here in au, parents still live in NZ but are migrating here in the next 2yrs. They have some cash sitting around and have thrown the idea of us going in 50/50 - Parking their cash for a couple years as a decent deposit.

I would live in and cover the shortfall mortgage, Renovate, and we would look to potentially sell in future.

Tax implications & buying with family aside, what lenders would look at this taking my income & also foreign income into account so we can go 50/50 on title?

 

NZ citizens are treated by the banks the same as Australians I believe

 

NZers face a range of issues with state OSR duty and land tax rules. Kiwis have a FIRB exemption however. If Dad was a South African citizen and Mum is a NZ citizen and both are NZ tax resident there could be serious implications so check with lawyer. Dont assume people are citizens without careful double checking. Citizenship isnt obvious.This issue was evident for people like Barnaby Joyce.

The stamp duty and land tax issues may be harder esp the 200 days test . The visa requirement is NOT the automatic exemption at the airport Definition of a foreign person

Check your relevant state rules. They vary a bit but are somewhat similar. The absentee rule for land tax in QLD is a bit different. Its often easier to defer the purchase until all parties are resident within the required definitions.

 

Being a NZ citizen isn't an issue with most lenders when it comes to lending.

However what you need to be aware of is that by going on the title with someone else you are limiting your lending options in the future.

If you do the purchase in joint names and then you as an individual go and purchase another property then most lenders with the exception of some like St George, CBA , AMP, Heritage, etc will take on the full debt and only half of the rental income. That is assuming that the other party (being your partners) can show that they can service their portion of the loan which on the face of it I would doubt.

So in summary its a really bad idea to purchase a property in joint names as it limits your future borrowing capacity and lender options.