ING and Citibank stop lending to OZ expat property investors

Published:  19 Jun at 6 PM
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Aussie expat investors are being cut off from mortgages by an international bank’s Australian subsidiary.

ING Australia has announced it will no longer offer mortgages to expat Australians wishing to invest in home country property. It’s the second international lender to cut off credit to expat borrowers despite increasing demand from wealthy Australian nationals living overseas, with Citibank announcing the same cut off earlier this week. Australian property news websites are reporting the reasons behind the move are the complexity and expense of verifying borrowers’ income sources. Other publications are citing fears of a housing market slowdown across the region, and the Australian government’s recent introduction of harsher penalties for lenders breaching money-laundering regulations is suspected as the real cause for the bank’s decision.

Over a million Australian nationals are now living overseas, with local buyers’ agents and mortgage brokers reporting strong demand for prestigious properties in Sydney and Melbourne. According to real estate agents, many Aussies are now planning to return home after years overseas and are now keen to purchase real estate due to the low dollar. The A$ million-plus sector is booming, but the tightening of domestic bank lending for the A$3 million to A$5 million sector is slowing down sales at the lower level.

It’s not the first time ordinary Australian expats have had the rug pulled from under their feet, as many who’d opted for careers overseas before deciding to sell their Aussie homes, thus being forced by a new law to pay capital gains tax on the entire appreciation value. If the family home was lived in for, say, 30 years, that’s a huge gain which is now taxeable.

In addition, the government’s Australia First stance has caused previous crackdowns on Oz expats wishing to buy residential real estate. It’s the ‘non-resident for tax purposes’ label which is hitting hard on Australians working overseas, with many believing they’re now seen as nothing but potential collateral tax damage.
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