Buying property in Australia while living in the US is one of the most common goals for Australians abroad—and one of the most misunderstood. We sat down with Pau Lam, tax agent and expat specialist at Odin Mortgage & Tax, to answer the questions our community asks most.
Pau has been working with Australian expats across the US, UK, Hong Kong, Singapore, and UAE for years, helping them navigate the unique challenges of buying property back home while living overseas. As a former expat himself (11 years in Sydney before returning to Hong Kong), he knows the landscape firsthand.
General advice disclaimer: The information in this article is provided for general information purposes only and does not constitute financial advice, professional advice, or personal guidance. It does not take into account your individual objectives, circumstances, or needs. Before making any decision, we strongly recommend that you seek advice from a qualified financial professional.
Can Australians living overseas actually buy property in Australia?
This is the most common misconception we hear. Some people believe that only citizens and permanent residents living in Australia can buy property there. That's not true.
As long as you hold an Australian passport or permanent residency, you have full access to the Australian property market—new builds, existing homes, investment properties, the lot. You're not penalized or restricted just because you're living abroad.
The FIRB (Foreign Investment Review Board) rules that restrict property purchases? Those apply to foreign nationals without Australian citizenship or PR. If you're an Australian citizen on an E-3 visa in the US, FIRB doesn't apply to you. The current FIRB application fee has risen to around $30,000, so it's a relief that most of our community doesn't need to worry about it.
One nuance: if your partner is a non-Australian, you can still purchase jointly without triggering FIRB requirements, as long as at least one of you is Australian. However, there may be stamp duty surcharge implications (more on that below).
How does lending work for Australians earning USD?
Here's where things get more complicated. You're allowed to buy, but getting a loan is a different calculation.
If you were living in Australia, you'd have access to hundreds of lenders. For expats earning foreign income, that pool shrinks significantly. Pau estimates around 20-30 lenders were offering mortgages to overseas Australians a year ago, and that number has dropped slightly since. The good news: the Big Four banks (CBA, NAB, Westpac, ANZ) plus some international lenders like HSBC and various second-tier banks still lend to expats.
The key factors banks assess:
Income with a “haircut”: Banks don't use the current USD/AUD exchange rate. Instead, they apply a discount of 20-40% to your income to account for currency fluctuations. So if you earn $100,000 USD, some banks will only count $60,000-$80,000 in their calculations.
State taxes matter: Unlike most countries with a single income tax rate, the US has federal and state taxes. Some banks apply a blanket calculation regardless of which state you live in; others will look at your specific situation (which can work in your favor if you're in a low-tax state).
Credit cards work against you: This is a big one. In the US, having lots of credit cards with high limits boosts your credit score. In Australia, it's the opposite—banks view your total credit limit as a potential liability. Pau gave a stark example: $50,000 AUD in credit card limits can reduce your borrowing capacity by $200,000.
The strategy isn't to rush out and close all your cards. Instead, work with a broker to run the numbers first, then propose to the bank that you'll reduce credit limits as a condition of approval.
Do Australian banks check my US credit score?
No—and this surprises a lot of people.
Australian banks will pull your Australian credit file to check for any outstanding debts or issues, even if you've been away for 10 or 20 years. But they generally don't require a US credit report. They'll look at your US bank statements to understand your spending patterns, but your carefully cultivated 800 credit score doesn't directly factor in.
Your Australian credit file is mostly checking for red flags—outstanding debts, defaults, bad history. If you've been away for years and had no activity, that's usually fine. No news is good news. If you want to check your Australian credit score before starting the process, there are free services available (or Odin can help you pull a free report).
What are my Australian tax obligations if I buy property?
This is where planning becomes critical.
If you've been living overseas and haven't had any Australian income, you may not have filed an Australian tax return in years. That's understandable—but if you buy an investment property, you'll need to start filing again.
Non-resident tax status: As an Australian living abroad, you're likely considered a non-resident for tax purposes. This means:
- You only pay Australian tax on Australian-sourced income (your US salary isn't taxed by Australia)
- You don't get the $18,200 tax-free threshold that residents enjoy
- You pay tax from the first dollar at 30% (the top bracket is still 45%, same as residents)
Negative gearing still works: The good news is that negative gearing—where your property expenses exceed your rental income, creating a tax loss—still applies to non-residents. If your property earns $40,000 in rent but costs $50,000 in interest, agent fees, council rates, water, and maintenance, you have a $10,000 loss. You don't pay tax on that, and you can carry the loss forward to offset future income.
Clean up your ATO history: If you haven't filed in years, it's worth getting that sorted before buying. Pau mentioned working with someone who hadn't submitted a return in 25 years. While there typically aren't major penalties if you had no Australian income, you want your records clean and your non-resident status properly documented.
How does the double taxation treaty work?
Australia and the US have a Double Taxation Agreement (DTA) so you're not taxed twice on the same income.
Here's how it works in practice: You earn rental income in Australia, so you report and pay tax there first (at your non-resident rate). Then you report that same income on your US return—but you get a credit for the Australian tax you already paid.
If your Australian tax rate (30%) is higher than your US marginal rate, you don't owe anything extra to the IRS. If your US rate is higher (say, 35%), you pay the 5% difference to the US.
The timing can be annoying since Australia's tax year ends June 30 and the US tax year ends December 31, but it's manageable with proper planning.
What about stamp duty concessions?
Most Australian states offer stamp duty concessions or waivers for people buying their main residence—potentially saving you around 5% of the purchase price.
The catch: you typically need to live in the property within 12 months of settlement, usually for at least six months. For most expats, this isn't practical. You can't just pause your US life to move into a property for six months.
If you genuinely are planning to return soon and can meet the residency requirements, it's worth exploring. Otherwise, factor in full stamp duty as part of your purchase costs.
Stamp duty surcharge for foreign partners: If your partner is not an Australian citizen or PR and you want them on the title, most states charge a surcharge of 7-9% on top of regular stamp duty (so 12-14% total). One strategy is to purchase in just the Australian partner's name to avoid this, while still having the foreign partner act as a guarantor on the loan to boost borrowing capacity.
The capital gains trap for non-residents
This is one of the most important things to understand—and one of the most painful if you get it wrong.
No 50% CGT discount: Since 2012, non-residents for tax purposes don't get the 50% capital gains tax discount that Australian residents enjoy. If you sell a property and make $100,000 profit, you pay tax on the full $100,000, not $50,000.
The discount does come back if you return to Australia and become a resident again—it's calculated on a pro-rata basis. But if you sell while overseas, you pay the full rate.
The main residence exemption trap (critical): This is where people get hit with unexpected six-figure tax bills.
In Australia, your main residence (the home you live in) is exempt from capital gains tax. But a rule change in 2020 removed this exemption for non-residents at the time of sale.
Here's the nightmare scenario Pau described: Someone lives in their home for 20 years, moves overseas, becomes a non-resident, and then sells the property a year later. Even though they lived in it for two decades, because they're a non-resident when they sell, they lose the main residence exemption entirely. The capital gain accumulated over 20 years becomes fully taxable.
This can mean the difference between paying zero tax and paying a six-figure bill. If you own property in Australia that was your main residence, get advice before selling while you're overseas.
Can I buy through a trust or company structure?
Technically yes, but it's harder.
Company structures are the most difficult—very few lenders will touch them for overseas buyers. Trust structures are still possible, but Pau noted that even within Australia, the major banks are pulling back from trust lending. Expect fewer options and potentially worse rates.
For most expats, purchasing in your personal name is the most straightforward path. If you have specific reasons for wanting a different structure, get advice early—before you start looking at properties.
What are the practical steps?
The good news: everything can be done remotely. You don't need to fly back to Australia for any part of this process.
Timeline: If everything goes smoothly—you know what you want, your finances are in order, you find a property quickly—settlement can happen in as little as two months. More realistically, plan for 6-12 months from “I'm thinking about buying” to settlement.
The players involved:
- Mortgage broker/tax advisor: Start here to understand your borrowing capacity, tax structure, and what you can afford
- Buyer's agent (optional): Can help you find and secure property remotely, especially useful if you don't have family on the ground
- Conveyancer/legal team: Handles the contract and settlement
- Property manager: Takes over once you've settled, managing tenants and maintenance
Bank accounts: You don't need an existing Australian bank account. The lender will set one up as part of the mortgage process, and you can manage everything through online banking.
Transferring money: Moving USD to Australia for your deposit or mortgage payments isn't a taxable event—it's your money, you've already paid tax on it. Just make sure you compare FX rates and don't just use your bank's default transfer. The “no fee” transfers often hide terrible exchange rates.
The biggest mistake: siloed advisors
Pau's top warning was about using disconnected professionals who don't talk to each other.
If your broker is in Sydney, your accountant is in Melbourne, and they never communicate, you end up being the middleman—and mistakes happen. Classic example: your accountant recommends a trust structure for tax benefits, but your broker then discovers no bank will lend to that trust. You've already signed a contract. You lose your 10% deposit.
The advantage of working with a firm like Odin is having finance, tax, and legal under one roof. Everyone's looking at the same picture, and you're not trying to coordinate between three different companies in three different time zones.
Ready to start?
If you're 6-12 months out from wanting to buy, that's the sweet spot to start planning. Get your numbers checked, understand your borrowing capacity, clean up any ATO history, and figure out the right structure for your situation.
For questions about Australian mortgages and tax for expats, reach out to Odin Mortgage & Tax. And stay tuned for our upcoming webinar on international estate planning—important if you own property in multiple countries.
