A quickening in Australian property prices across 2023 and early 2024, combined with the Reserve Bank’s cash rate holding at 4.35 per cent since November 2023, has returned offshore self-employed capital to a market that was shuttered to them for much of the previous five years. But the gatekeepers have not been the same since the Banking Royal Commission. The major lenders retreated from non‑resident mortgage origination in 2017‑18, and their place has been taken by a small group of specialist non‑bank lenders — Pepper Money, La Trobe Financial, Resimac, Bluestone and Brighten Home Loans — each of which rewrites its credit appetite quarterly. For self‑employed borrowers who are neither citizens nor permanent residents, that means the answer to whether finance is available is not a simple yes; it is a constantly moving set of LVR caps, DTI ceilings, rate premiums and income‑evidencing tests that shift with liquidity and the regulatory mood. A single policy change — like Resimac tightening its foreign‑income DTI to 6.0 times in February 2024, or La Trobe repricing its non‑resident range by 25 basis points in April 2024 — can halve the purchasing power of an offshore director overnight. The present window, while open, demands precise structuring and an early audit of which lender’s policy date an applicant is relying on.
The regulatory boundary: FIRB, surcharges and the ATO
A non‑resident borrower, self‑employed or otherwise, first encounters a hard‑coded federal gate: the Foreign Investment Review Board. FIRB approval is not optional for a non‑permanent resident buying established residential property, and the application fee, revised each financial year, has become a meaningful transaction cost.
FIRB approval and the application cost
As of 1 July 2024, the fee for an established dwelling valued at $1 million or less is $13,200 (FIRB, 2024). For a property between $1,000,001 and $2 million, the fee rises to $26,400. The fee is levied per application, not per approval, and it is non‑refundable if the board denies the purchase. Processing times, according to the Treasury’s own guidance, stretch to 40 business days, though a well‑prepared application with a clean source‑of‑funds statement can clear in less than half that window. FIRB also imposes a vacancy fee for established dwellings that are not occupied or genuinely available for rent for at least 183 days a year, a detail that catches buyers who assume a holiday‑only use case is permissible.
State stamp duty surcharges and ATO withholding
State revenue offices add a further fixed loading. In New South Wales, a foreign person surcharge of 8 per cent of the dutiable value is levied on top of the standard transfer duty, meaning an $800,000 apartment can attract a combined duty of roughly $97,000. Victoria applies an 8 per cent surcharge, with an additional absentee owner surcharge on land tax. Queensland uses a 7 per cent foreign acquirer duty. These surcharges are not discretionary and cannot be capitalised into the loan; they must be funded from the borrower’s own cash reserves.
At the point of disposal, the Australian Taxation Office withholds 12.5 per cent of the property’s sale price under the foreign resident capital gains withholding regime, effective from 1 July 2024 (ATO, 2024). That withholding applies regardless of whether a capital gain is actually realised, and the seller must file a tax return to claim any refund. For a self‑employed non‑resident who may already be managing two‑jurisdiction tax affairs, the cash‑flow lag can be material.
Specialist lender policies for the self‑employed non‑resident
Major banks’ curated non‑resident products are largely unavailable to applicants who cannot produce employer‑verified payslips. The specialist non‑bank sector has become the sole distribution channel, and within it, not every lender accepts alternative income evidence from a non‑resident. The pool that does — Pepper, La Trobe, Resimac, Brighten and, in limited scenarios, Bluestone — applies distinct LVR, DTI and document rules that are refreshed frequently.
Which low‑doc pathways are open
Three primary documentation pathways are accepted, in descending order of rate advantage:
- BAS‑only (business activity statements) — at least four consecutive quarterly BAS lodgements, verified through the ATO portal, are used to annualise business revenue. Pepper Money and Brighten will accept this for non‑resident self‑employed applicants, with Pepper’s September 2023 policy update permitting a 65 per cent LVR up to $1 million for a BAS‑verified file.
- Accountant’s letter — a declaration from a registered tax agent or CPA confirming the applicant’s trading history and income capacity. La Trobe Financial will accept an accountant’s letter for its Specialist Residential Loan, capping LVR at 60 per cent, provided the entity has been trading for 24 months and the letter is less than 90 days old. Resimac similarly allows an accountant letter, but with a DTI ceiling of 6.0 times gross foreign income, reduced from 7.0 in February 2024.
- Asset‑lend (net asset position) — where the borrower does not wish to disclose business income, some lenders will write a loan based on verified global assets that can service repayment obligations. Brighten’s asset‑lend non‑resident product, launched in March 2024, requires liquid assets equal to at least 1.5 times the loan amount and applies a maximum LVR of 55 per cent.
Serviceability calculators apply a floor interest rate — usually the product rate plus a 3 per cent buffer — which for a 7.49 per cent p.a. product becomes a 10.49 per cent assessment rate. That buffer alone can exclude a borrower whose gross income looks adequate on a headline coupon.
LVR and DTI caps at a glance
Each lender’s current non‑resident, self‑employed parameters, as at mid‑2024, can be summarised without rounding:
- Pepper Money (non‑resident product, September 2023 update): Maximum LVR 65 per cent for BAS‑verified self‑employed, minimum loan $150,000. DTI not explicitly capped, but total net servicing ratio assessed at 10.5 per cent assessment rate.
- La Trobe Financial (Specialist Residential, May 2024): Maximum LVR 60 per cent, minimum loan $100,000, maximum loan $2,000,000. Accountant letter required; no BAS pathway. DTI soft cap of 7 times gross foreign income, with hard scrutiny above 6 times.
- Resimac (non‑resident Prime, February 2024): Maximum LVR 60 per cent, maximum loan $1,500,000. Foreign income accepted with 20 per cent haircut if not in AUD, and DTI capped at 6.0 times post‑haircut income.
- Brighten Home Loans (Near‑Prime non‑resident, March 2024): Maximum LVR 60 per cent for BAS self‑employed, 55 per cent for asset‑lend. Assessment rate 9.99 per cent. No specific DTI line, but total net income surplus required above mortgage repayment.
- Bluestone (non‑resident alt‑doc, current): Available selectively, often through New Zealand or Singapore channels, maximum LVR 55 per cent, minimum 24 months’ trading history.
It is critical to note that these figures are point‑in‑time and can be repriced without notice. A borrower who received a credit quote in March 2024 cannot assume it holds in July 2024; two of the five lenders touched their pricing or DTI limits in the first quarter of the year.
The currency question and income haircutting
Self‑employed non‑residents typically earn in a foreign currency — Singapore dollars, US dollars, Malaysian ringgit — and every Australian non‑bank applies a haircut to mitigate exchange‑rate risk. The standard haircut is 20 per cent of gross foreign income, but some lenders go further: Resimac’s current foreign‑income policy deducts 20 per cent for currencies pegged or tightly managed against the Australian dollar (SGD, HKD) and 30 per cent for floating‑rate currencies (USD, GBP). That haircut is applied before the DTI test, so a Singapore‑based director earning S$200,000 is treated as earning S$160,000 (or A$182,000 at a 0.88 exchange rate), and the DTI calculation must fit within the lender’s cap.
A further complexity is exchange‑rate averaging. Most lenders take a six‑month average of the relevant central bank midpoint, not the spot rate, which can work against a borrower if the AUD has strengthened in the preceding periods.
Structuring the purchase: entity, deposit and repayment
A self‑employed non‑resident must decide whether to buy in their own name, through an Australian trust or via a foreign company. The choice affects FIRB status, stamp duty and lender appetite.
Individual ownership
Individual names on title are the simplest for FIRB and for the lender’s security‑taking process. An individual non‑resident is eligible for FIRB approval for a new dwelling or an established dwelling they intend to occupy as their principal Australian home, though the “principal home” test is strict. If the borrower later moves offshore, FIRB may deem them to have vacated the property, triggering the vacancy fee. Stamp duty surcharges apply to the person, not the entity.
Trust or company structures
A discretionary trust with a foreign trustee will be treated as a foreign person for FIRB purposes, attracting the same application fee and a higher vacancy oversight burden. Several non‑bank lenders, including Brighten and La Trobe, will accept a company borrower with an unregistered foreign charge, but only where the individual guarantor is personally assessed for serviceability. The premium on the loan typically rises by 15‑25 basis points due to the additional legal work and security complexity. In New South Wales, a foreign company is also liable for the land tax surcharge, currently 4 per cent of the taxable land value, even if the dwelling is owner‑occupied by the director.
Repayment buffers and exit strategy
Lenders will not write a loan if the net monthly surplus after tax, living expenses and all debt commitments falls below a razor‑thin margin — commonly $1,000 per month. With current non‑resident rates at 7.25‑7.99 per cent p.a., the principal‑and‑interest repayment on an 80 per cent‑of‑value debt slice (where allowed) can easily consume 60 per cent of net income. Borrowers who plan to refinance at expiry of the fixed‑rate period — usually three years — should model a scenario in which the loan reverts to a standard variable rate 100‑150 basis points above the fixed cap.
A real‑cost illustration: $800,000 purchase on a 60 per cent LVR
Take a self‑employed Singapore citizen buying an established apartment in Sydney for $800,000. She needs FIRB approval: $13,200 fee. Stamp duty in NSW (after 8 per cent surcharge) is approximately $88,000, bringing total acquisition cost to $901,200. With a 60 per cent LVR — the highest available from Brighten and La Trobe — the maximum loan is $480,000, leaving a required cash contribution of $421,200. If she opts for a BAS‑only loan from Pepper at 65 per cent LVR, the loan rises to $520,000 and the equity requirement drops to $381,200.
On a $520,000 loan at Pepper’s indicative non‑resident rate of 7.49 per cent p.a., the monthly principal‑and‑interest repayment over 25 years is $3,837. The assessment rate of 10.49 per cent lifts the qualifying repayment to $4,997, demanding a post‑tax monthly income of at least $8,500 after all existing commitments. For a Singapore‑based director paid in SGD, that translates to roughly S$260,000 gross per annum, given the 20 per cent haircut and serviceability margin.
Five immediate steps for a non‑resident self‑employed applicant
- Lock in a policy date, not just a quote. Lenders revise non‑resident terms quarterly. Obtain a written credit‑policy snapshot — not a generic “we do non‑resident” email — dated within 30 days of the intended application.
- Prepare four quarters of lodged BAS statements, a certified accountant letter and a six‑month transaction history for the business account. Having all three ready avoids a document‑chasing delay that can push the application past a policy expiry.
- Apply the currency haircut and buffer early. Convert net foreign income using the lender’s own exchange‑rate methodology — usually the six‑month RBA midpoint — and deduct the mandated haircut (20‑30 per cent) before running a DTI test. If the DTI exceeds the lender’s cap, reduce the loan quantum now, not after a valuation.
- Factor cash‑outflow headroom for FIRB and surcharges. These are not lender‑fundable. Ring‑fence the exact application fee and the state surcharge in a separate AUD‑denominated account before exchange.
- Stress‑test the exit. Model a reversion to a variable rate 150 basis points above the current fixed offer and a 10 per cent AUD appreciation against the income currency. If the loan still services under those conditions, the structure is durable; if not, reduce the LVR or increase the deposit.