About This Guide
If your child is studying at an Australian university, you are already spending significantly on their education — tuition fees, living allowances, rent, and return airfares. Many families spend A$30,000–A$50,000 or more per year on these costs, for three to four years. And at the end of it, they have little to show for the accommodation spend except receipts.
This playbook explores a question more and more Malaysian and Singaporean families are asking: instead of paying someone else's mortgage through rent, could we own the property our child lives in? And if so, what does that look like — financially, legally, and practically?
The answer is: yes, it is possible, and for the right family it can be a smart move. But it comes with specific rules, tax considerations, and trade-offs that this guide walks through honestly. It is not the right decision for everyone — but it deserves a serious look.
Your Child Is Already There
Property Can Work for You
Costs Offset by Rental Income
A Foot in Australia's Future
What Are You Actually Spending?
Most families focus on tuition fees when budgeting for an Australian education. But accommodation is often the second-largest cost — and unlike tuition, it is a pure expense with no return. Here is a simple comparison of what renting costs versus what owning a property might look like over a typical four-year degree, applying a 4% annual increase to rental costs — consistent with recent Melbourne and Perth rental growth trends.
"Note: Holding costs include land tax, council rates, strata fees (if applicable), and insurance. Rental total compounds at 4% per annum. Figures are indicative — actual costs depend on property type, city, and individual circumstances."
The core logic is straightforward: the money you would have spent on rent over four years — potentially A$110,000–A$155,000 once annual increases are factored in — can instead go toward holding an asset that earns capital growth over time and can be converted to a rental investment or sold after your child's studies are complete.
This does not mean buying property is always the right answer. There are upfront costs, tax considerations, and management responsibilities. But the comparison deserves to be made honestly — and for many families, the numbers stack up.
| RENTING (Typical Scenario) | OWNING (Property Purchase) | |
|---|---|---|
| Weekly accommodation cost | A$500–A$700/week | A$0 (child lives in your property) |
| Year 1 annual cost | A$26,000–A$36,400 | Holding costs: ~A$8,000–A$15,000 |
| 4-year total (4% annual increase applied) | ~A$110,000–A$155,000 | ~A$32,000–A$60,000 (total holding costs) |
| Asset at end of study | Nothing | A property that has (likely) grown in value |
| Rental income option | N/A | Rent spare rooms to offset holding costs |
The Foreign Investment Rules — What Parents Need to Know
As an overseas investor, the same FIRB (Foreign Investment Review Board) rules that apply to all foreign buyers apply to you. The key rule right now:
From 1 April 2025 to 31 March 2027, foreign investors cannot purchase established (second-hand) dwellings under temporary visa. You must buy new.
What You CAN Buy
— Brand new apartments or houses — off-the-plan or newly completed, never previously occupied — Vacant land — with a commitment to build within 4 years — New house and land packages
Does It Matter That Your Child Will Live in the Property?
Yes — and this is where the student family scenario has a unique dynamic. Your child living in the property does not change your status as a foreign investor under FIRB rules. You are still the owner, and the same FIRB approval and surcharge requirements apply. Your child is simply an occupant.
This is important for tax purposes too — see Part 4 for a full explanation of what it means for deductibility and capital gains when your child lives there rent-free versus paying market rent.
FIRB Application
All foreign buyers must apply to the FIRB before purchasing. FIRB approval is routinely granted for new residential properties. The application fee starts at approximately A$15,100 for properties under A$1 million, scaling with purchase price and could be completed online.
Which City — Melbourne or Perth?
Both Melbourne and Perth have large, established Malaysian and Singaporean student communities. Your choice of city will likely follow where your child is studying — but the property investment case differs between them:
A note on new property pricing: The price ranges above reflect new and off-the-plan stock — which is what foreign buyers are currently restricted to. Median apartment figures for the broader market include older, established stock which tends to be cheaper. New apartments near major university precincts are typically priced higher than the market median, and in premium locations can exceed A$1 million. Speak with our team for current new-stock pricing in your preferred suburb and near your child's university.
| MELBOURNE | PERTH | |
|---|---|---|
| Key universities | Uni. of Melbourne, Monash, RMIT, Deakin | UWA, Curtin, Murdoch, ECU |
| New apartment price range (foreign buyers — new stock only) | A$650,000–A$1M+ (university precincts) | A$600,000–A$950,000+ (university precincts) |
| Gross rental yield | 3.5%–5%+ (location dependent) | 4%–5%+ (location dependent) |
| Foreign stamp duty surcharge | 8% | 7% |
| Absentee owner land tax surcharge | 4% (added to land tax) | None |
What Does It Cost to Buy?
The upfront cost of buying property as a foreign investor is meaningfully higher than for Australian residents, due to the foreign purchaser stamp duty surcharge and FIRB application fees. Here is an indicative breakdown based on an A$800,000 property — a realistic entry point for a new one or two-bedroom apartment near a major university precinct in either Melbourne or Perth.Budget 13–16% of the purchase price in total upfront costs as a foreign buyer. This is in addition to your deposit or equity used to fund the purchase.
Off-the-Plan Stamp Duty Concession
A meaningful concession is currently available for off-the-plan apartment and townhouse purchases. In Victoria (Melbourne), this runs until October 2026. In Western Australia (Perth), it expires 30 June 2026. Both concessions can reduce the dutiable value substantially — for a student family purchasing near a university, acting before these deadlines could save A$15,000–A$30,000 in stamp duty. Contracts must be signed before the respective deadline.
Deposit and Financing
Foreign buyers typically need a deposit of 30%–40% of the purchase price, as Australian retail banks do not lend to non-residents. Financing is available through Australian non-bank lenders, private financiers, and banks in Malaysia (Maybank, CIMB) and Singapore (UOB) — subject to their own criteria and restrictions. See Part 6 for a full financing overview.
| COST ITEM | MELBOURNE (EXAMPLE) | PERTH (EXAMPLE) |
|---|---|---|
| Purchase price (example) | A$800,000 | A$800,000 |
| Standard stamp duty | ~A$43,000 | ~A$35,000 |
| Foreign purchaser surcharge | ~A$64,000 (8%) | ~A$56,000 (7%) |
| FIRB application fee | ~A$15,100 | ~A$15,100 |
| Legal / conveyancing | A$2,000–A$4,000 | A$2,000–A$4,000 |
| Building / strata inspection | A$500–A$1,500 | A$500–A$1,500 |
| TOTAL UPFRONT (approx.) | ~A$925,000–A$928,000 | ~A$909,000–A$912,000 |
Tax — The Part That Needs More Thoughts
This is the section most families skip — and the one that matters most. The tax treatment of a property that your child lives in is different depending on how you structure the arrangement, and getting it wrong can be costly. This guide gives you the framework; always engage a qualified Australian tax accountant to confirm what applies to your specific situation.
Scenario A: Your Child Lives There Rent-Free
This is the most emotionally natural arrangement — you buy the property and your child lives in it without paying rent. Financially, this means:
— You cannot claim tax deductions on property expenses (loan interest, council rates, insurance, strata fees) while the property is not earning income. The ATO requires that expenses be incurred in the production of assessable income to be deductible.
— However, non-deductible holding costs from the private use period may be added to the property's cost base when you eventually sell — reducing your capital gains tax liability at that time.
— Building depreciation and plant and equipment depreciation can only be claimed for periods the property is rented or available for rent on commercial terms.
— When you sell, foreign residents cannot claim the main residence CGT exemption — removed for foreign residents from 30 June 2020. The full capital gain is taxable at non-resident rates, with no 50% CGT discount on gains accrued after 8 May 2012.
Scenario B: Your Child Pays Market Rent
If your child pays market rent — the going rate for a comparable property in the area — the tax picture changes significantly:
— Rental income is assessable income and must be declared in Australia at non-resident tax rates (starting at 32.5%, with no tax-free threshold).
— You can claim all legitimate property expenses as deductions — loan interest, property management fees, council rates, strata fees, insurance, repairs, and depreciation.
— New off-the-plan properties offer substantial depreciation benefits — both on the building structure (2.5% of construction cost per year) and on plant and equipment (appliances, carpet, blinds, etc.). A quantity surveyor's depreciation report is essential to maximise these claims.
— The rental income your child pays may effectively be money you are providing to them anyway — many families transfer funds to the child, who pays rent back to the parents. This is legitimate provided it is at market rates and properly documented. Consult an accountant before implementing.
"KEY INSIGHT: Renting to your child at market rates unlocks deductions and depreciation benefits that a rent-free arrangement does not. The after-tax cost of ownership is often significantly lower when structured correctly."
Scenario C: Renting Spare Rooms to Other Students
Many parents buy a two or three-bedroom apartment so their child occupies one room while the remaining rooms are rented to other students at market rates. This hybrid approach:
— Generates rental income from the tenanted rooms — assessable and must be declared
— Allows a proportionate share of property expenses to be claimed as deductions, based on the floor area used for rental versus the area occupied by your child
— Can significantly offset holding costs — two rooms rented at A$350–A$500 per week each can generate A$36,000–A$52,000 per year in gross income
— Is more complex to administer and requires a property manager and clear tenancy agreements
Capital Gains Tax When You Sell
When you eventually sell — after your child's studies, or years later — the capital gain is subject to Australian CGT. As a foreign investor:
— No main residence exemption is available to foreign residents (removed from 30 June 2020)
— No 50% CGT discount on gains accrued after 8 May 2012 for foreign residents
— From January 2025, foreign resident capital gains withholding of 15% applies to all property sales — the buyer must withhold 15% of the purchase price and remit to the ATO regardless of the actual tax liability. Lodge a tax return to claim any overpayment back.
— Stamp duty, legal fees, and non-deductible holding costs during private use periods can be added to the cost base, reducing the taxable gain
Tax law is complex and the above is a general overview only. Your specific outcome depends on your residency status for Australian tax purposes, how long you hold the property, how it was used, and the applicable tax treaty between Australia and your home country. Always engage a registered Australian tax agent with non-resident experience before making any decisions.
| ANNUAL HOLDING COST SUMMARY | MELBOURNE (APPROX.) | PERTH (APPROX.) |
|---|---|---|
| Land tax (incl. absentee surcharge where applicable) | A$4,000–A$8,000 | A$2,000–A$4,000 |
| Council rates | A$1,500–A$2,500 | A$1,200–A$2,000 |
| Congestion levy (if applicable — Melbourne only) | A$0–A$2,000 | N/A |
| Strata fees (apartment) | A$3,000–A$7,000 | A$2,500–A$6,000 |
| Insurance | A$1,000–A$2,000 | A$1,000–A$2,000 |
| Total holding costs (approx.) | A$9,500–A$21,500 | A$6,700–A$14,000 |
What You Pay zYear
Understanding the annual holding cost is essential to modelling whether the investment makes sense for your family. Here are the main ongoing costs to budget for:
Land Tax
Both Victoria and Western Australia charge annual land tax on the unimproved value of your investment land above a threshold. Victoria additionally imposes a 4% absentee owner surcharge for overseas investors, which significantly increases the annual cost compared to Perth, where no such surcharge applies. Land tax is assessed on the total value of your WA or Victorian land holdings above the applicable threshold.
Council Rates
Annual council rates vary by suburb and property type. Budget approximately A$1,200–A$2,500 per year for a metropolitan apartment or house.
Congestion Levy — Melbourne CBD and Inner Suburbs
Property owners in certain Melbourne CBD and inner-city locations may be subject to the Victorian Congestion Levy, an annual state government charge on car parking spaces associated with a property. If the apartment you purchase includes a car park — as many new apartments do — and the property falls within a designated congestion levy zone, this levy applies to the owner regardless of whether the space is used. The levy varies by zone and is indexed annually; in higher-density zones it can run to A$1,000–A$2,000+ per year per space. Check whether any Melbourne CBD property you are considering falls within a levy zone before purchasing, and factor this into your annual holding cost. This levy does not apply in Perth.
Strata / Body Corporate Fees
If you purchase an apartment or townhouse, annual strata fees cover building insurance, common area maintenance, and shared facilities. These range from A$3,000–A$7,000+ per year depending on building size and amenities. Boutique low-rise buildings generally carry lower fees than large high-rises — a meaningful difference in net yield.
Building and Landlord Insurance
Building insurance is typically included in strata fees for apartments. For houses, budget separately. Landlord insurance — covering rent default, tenant damage, and liability — is recommended and typically costs A$1,000–A$2,000 per year.
Property Management
Most overseas investors appoint a local property manager to handle tenanting, maintenance, rent collection, and compliance with state tenancy laws. Fees vary by state: in Melbourne, expect 6%–8% of gross annual rent; in Perth, typically 8%–10%. A letting fee of 1–2 weeks' rent also applies each time a new tenant is placed. If your child manages informal housemate arrangements, this cost may be avoided — but the legal compliance risk increases, and a property manager is strongly recommended where other tenants are involved.
Financing — Yes, It's Available
The major Australian retail banks generally do not offer home loans to non-residents or foreign nationals. But financing is available through several well-established channels.
Australian Non-Bank & Private Lenders
Second-tier lenders, private financiers, and specialist non-bank institutions offer mortgage products to foreign buyers. LVRs are typically capped at 60%–70%, requiring a 30%–40% deposit. Interest rates are higher than standard resident rates, and criteria vary between lenders. An experienced broker who works with foreign buyers is essential.
Malaysian Banks — Maybank & CIMB
Maybank and CIMB both offer financing for overseas property purchases including Australian residential property, subject to eligibility criteria, currency restrictions, and maximum loan amounts. These can be practical options if you have an established relationship with either bank.
Singapore Banks — UOB
UOB offers overseas property financing including in Australia, subject to restrictions. Borrowing in SGD against an AUD asset introduces currency risk — if AUD weakens, your effective debt burden increases. Factor this into planning.
A Note on Currency
Families already paying tuition and living costs in AUD are exposed to exchange rate movements. A property purchase adds to that exposure but also creates an AUD-denominated asset that may appreciate over time. Some families view this as a natural hedge against their ongoing AUD obligations.
What Happens to the Property When Your Child Finishes?
One of the questions families ask most is: what do we do with the property after my child graduates? The answer depends on your goals — but there are several strong options, and this is often where the long-term value of the investment becomes clearest.
Option 1: Your Child Stays in Australia (Temporary Graduate Visa)
After completing a degree, international graduates can apply for the Temporary Graduate Visa (Subclass 485), which allows them to live and work in Australia temporarily. As of the updated 2024/2025 rules: 2 years for Bachelor's and Master's coursework degrees, 3 years for Master's by research, and up to 4 years for PhD graduates. During this period, your child continues living in the property — extending the period before you need to make a decision, while they build work experience and potentially pursue permanent residency pathways.
Option 2: Convert to a Full Rental Investment
Once your child moves out, the property becomes a straightforward rental investment. All holding costs become deductible against rental income, and you can appoint a property manager to run it entirely remotely. Melbourne and Perth both have strong long-term rental demand, and your property will likely have grown in value during the years your child was studying.
Option 3: Your Child Purchases the Property from You
If your child gains permanent residency or Australian citizenship, they can purchase the property from you. As an Australian resident buyer, they would pay standard stamp duty rates with no foreign surcharge, and gain access to the main residence CGT exemption if they live in it. This can be a powerful intergenerational wealth transfer — but requires careful legal and tax structuring, including independent valuation for stamp duty purposes.
Option 4: Sell and Realise the Capital Growth
You sell the property and realise whatever capital growth has accrued. Be aware of the foreign resident CGT rules (Part 4) — no main residence exemption, no 50% discount on gains accrued after May 2012, and a 15% withholding at settlement. A registered tax agent will help you plan the sale to minimise liability and manage the withholding process.
Option 5: Hold as a Long-Term Investment
Some families simply hold the property indefinitely as a long-term Australian investment, renting it out professionally after their child moves on. Melbourne and Perth both have structural undersupply and population growth that supports long-term capital appreciation. This is increasingly common among families who see the property as the beginning of an Australian investment portfolio rather than a one-off decision.
Property Ownership & Australia's Migration Pathways.
For many Malaysian and Singaporean families, an Australian education is not just about the degree — it is a considered first step toward potential migration. Property ownership fits naturally into this longer-term view.
Student Visa (Subclass 500)
Your child's entry point. Allows full-time study and up to 48 hours of work per fortnight while enrolled. The visa duration matches the course length. Students enrolled in research or doctoral programmes have unlimited work rights.
Temporary Graduate Visa (Subclass 485)
After graduating, your child can apply within 6 months of completing their studies. Duration: 2 years for Bachelor's or Master's coursework, 3 years for Master's by research, up to 4 years for PhD. Allows full-time work in any occupation — the key period where your child builds Australian work experience toward permanent residency.
Skilled Migration Pathways
From the 485 visa, graduates with relevant skills and work experience can pursue permanent residency through the Skilled Independent Visa (189) — points-tested, no sponsorship; the Skilled Nominated Visa (190) — requires state or territory nomination; or Employer-Sponsored Visas (482/186) — requires a job offer from an approved employer.
Property Ownership and Migration
Owning property in Australia does not directly earn migration points or accelerate a visa application. However, it creates a tangible anchor to Australia — a home base as your child transitions from student to worker to potential permanent resident. Families who own property tend to remain more engaged with Australia long term, which often correlates with successful migration outcomes.
Common Pitfalls for Student Families
Thinking Your Child Living There Changes the FIRB Rules
Your child's residency in the property does not exempt you from FIRB requirements or foreign stamp duty surcharges.You are still a foreign investor, and all the same rules apply. The property must be new or off-the-plan — not established.
Not Getting the Rent-Free vs Market Rent Decision Right
Letting your child live rent-free has significant tax implications that a market-rent arrangement avoids. If you want to claim deductions on your property expenses, the property must be genuinely rented at market rates. Attempting to claim deductions while not receiving market rent is a compliance issue the ATO specifically monitors.
Forgetting the CGT Position at Sale
As a foreign resident, you will pay CGT on the full capital gain with no main residence exemption and no 50% discount.For a property bought at A$800,000 and sold at A$1,100,000, that is a A$300,000 taxable gain at non-resident rates — less any eligible cost base additions. Plan for this from the outset, not at the point of sale.
Underestimating Total Upfront Costs
The foreign stamp duty surcharge, FIRB fee, and legal costs add 13–16% to the purchase price on top of the property value itself. Always model the total cost-in before committing to a contract.
Overlooking the Melbourne CBD Congestion Levy
If you are purchasing a new apartment in Melbourne's CBD or inner suburbs that includes a car park, check whether the property falls within a congestion levy zone. This is an ongoing annual cost that many buyers only discover after purchase. Ask the developer or your conveyancer to confirm levy status before signing.
Putting the Property in the Student's Name
Students on a student visa are still classified as foreign persons for stamp duty and FIRB purposes. Only Australian citizens or permanent residents are exempt from foreign buyer surcharges. Putting the property in the student's name does not avoid the surcharge and can create additional complications.
Managing from Overseas Without Local Representation
Tenancy laws, maintenance requirements, and strata compliance are specific to each state. A qualified local property manager protects both the property and the tenancy relationship — including when your child is living alongside other tenants. The cost of good local representation is small relative to the risk of getting it wrong.
Let's Work Out If This Makes Sense for Your Family
Every family's situation is different — your budget, your child's university, the course duration, your migration intentions, and your tax position all affect whether property ownership makes sense and how to structure it. ARE Property Australia works with Malaysian and Singaporean families who have children studying in Australia, helping them think through the decision clearly and — where it makes sense — finding and purchasing the right property.