Australian expats should be wary when buying property back home: Buyers’ agents
Sunday, December 23, 2012/
Australian expatriates often buy properties back in Australia.
Perhaps not necessarily when the Australian dollar is as high as present, but they do always have in their minds their eventual return to what will be their family home when their overseas assignments end.
The buying of a house back home raises many personal and financial issues regarding the selection of the property, the potential capital gains tax (CGT) treatment, negative-gearing tax breaks, and the possible tax consequences if rental income exceeds deductible costs.
Some Australian expats rely heavily on their Australian-based relatives to inspect, at least initially, possible purchases.
And many expats hire buyers’ agents to search and negotiate for properties that match their criteria.
Despite the high Australian dollar, real estate agents and buyers’ agents say there are great buying opportunities for cashed-up expats given the depressed state of the Australian market – particularly at the upper end.
Property Observer has published an eBook written specifically for Australian citizens who are residents of another country, including for tax purposes, during extended overseas assignments.
Veteran personal finance and property journalist Michael Laurence was the author who has sought out buying tips and warnings from real estate agents Ross Savas of Kay & Burton Real Estate, Shayne Harris of Savills Australia and Angus Raine of Raine & Horne.
Buyers’ agents David Morrell of Morrell and Koren, Rich Harvey of propertybuyer and Peter Kelaher of PK Property Search and Negotiators have provided valuable insider strategies too.
David Morrell, a director of Melbourne buyers’ agent Morrell and Koren, warns that some vendors regard Australian expatriate buyers as “wood ducks”, or easy targets. For those expats who have been out of the country too long, a “wood duck” is an Australian term for a “useless bastard”. The term emerged in the 1970s and was used by car salesmen to denote an easy mark. This is not to be confused with the American or Australian wood duck.
Morrell says some unfortunate expat buyers unwittingly send a clear message to vendors that they have plenty of money, are poorly informed about the local property market and have little time to inspect properties.
His advice is straightforward: “Slow down, take a Panadol, and do your due diligence on the market”.
Shayne Harris, head of residential for international agency Savills Australia, says he tries not to disclose to vendors that a would-be buyer is an expatriate.
Harris says vendors may jump to the conclusion that the expatriates have plenty of money.
“It makes a very difficult negotiation, because some people think they can afford to pay anything.
“We often say to vendors, ‘The reason they have money is because they don’t pay silly money for things’.”
For more on Australian expats buying property back home, download our free eBook. This article first appeared on Property Observer.