Accepted Australian expat incomes

PAYG Income

What income is accepted for an Australian expat investment loan? Ordinary Income used for Australian expat lending is generally in-line with standard lending practices and can be accepted.

Lenders will shade foreign income (depending on the currency the income is generated in) and take a portion for borrowing purposes.

For tier one currencies, lenders will generally take 80% of the income. For tier two or silver type currencies, this currency will still be accepted, this can be shaded by up to 60% of the income.

Lenders will be more comfortable with expats who can demonstrate that they are generating PAYG income from an employer. Lenders would request to see an employment contract, confirming the length of employment and the salary package. This will also be compared against the last 3 months of bank credits (to confirm the NET income matches the employer's payslip, after the tax amount)

If an expat receives other income as part of a salary package (for example commission, bonuses, allowances) these can be accepted as income for servicing purposes. You would need to demonstrate that this is part of your ordinary income (which could be confirmed with your employment contract) and for payments such as commission and bonus you would need to show a consistent history of earnings.

Bonus Income

Provided this has been paid to the expat for greater than a two year period, a portion of bonus income can be accepted for borrowing purposes.

Australian Rental Income

Existing and proposed rental income can be accepted for borrowing purposes. Generally, lenders will take 80% of the gross rental income for servicing. For existing properties, this will be confirmed against rental statements and for a proposed purchase this can be verified using a rental estimate and the bank valuation.

Negative Gearing

The negative gearing benefits that Australian tax residents receive, cannot be accepted for expats living overseas. Lenders take the assumption that the borrower is not an Australian tax resident and the negative gearing benefit will not apply to your borrowing capacity.

Overseas Rental Income

Rental income received from overseas investment properties can be accepted for servicing purposes. This income is converted to AUD and shaded per normal lending guidelines. If the borrower has an overseas mortgage, this will need to for servicing purposes.

Self Employed Income

Self-employed income for borrowing purposes can be accepted. Full financials and an accountants letter will be required to present to the bank, particularly if the tax jurisdiction is significantly different to the Australian Tax system.

If the financials are not presented in English, this will need to be translated for certification purposes.

To read more about the costs involved for Australian Expats. To read more about Australian Expat Home Loans

We also have an office in Sydney and Gold Coast, Australia. You can contact our main Australian business on 1300 928 227 or email info@hfinance.com.au.