Buying A Home In Australia As A Foreign Person

A Practical Guide to Residential FIRB Approval

Important: established homes are currently restricted

Foreign buyers cannot assume they are able to purchase any residential property in Australia.

From 1 April 2025 to 31 March 2027, foreign persons — including temporary residents and foreign-owned companies — are generally restricted from purchasing established dwellings in Australia. Limited exceptions apply, but for most individual foreign buyers, an existing house or apartment will not be a realistic option during this period.

Foreign buyers may still be able to purchase new dwellings, near-new dwellings, or vacant residential land, but approval may be required and conditions may apply.

The correct position depends on who the buyer is, the type of property being purchased, and how the transaction is structured.

Who this article is for

This article is for foreign individuals looking to purchase residential property in Australia, including temporary residents, overseas buyers, and Australian sellers or agents dealing with foreign purchasers.

It explains:

• when residential FIRB approval may be required;
• how different types of residential property are treated;
• the current temporary restrictions on established dwellings;
• application fees and timing issues;
• vacancy fee obligations after purchase; and
• practical steps to take before signing a contract.

This article focuses on residential property purchases. The foreign investment regime applies differently to commercial land, agricultural land, business acquisitions, and development projects. For those matters, see our separate article on Commercial FIRB Approvals.

Do Foreign Buyers Need Approval?

Many foreign persons need approval before acquiring residential property in Australia.

For most residential purchases, the approval process is administered through the Australian Taxation Office (ATO), rather than through the Treasury portal commonly used for larger commercial foreign investment applications.

Whether approval is required depends first on whether the buyer is a “foreign person” under the foreign investment rules. Some buyers may not require approval, including Australian citizens, permanent residents, and certain New Zealand citizens, depending on the circumstances. Different rules may apply where property is being purchased jointly with an Australian citizen, permanent resident, or spouse or de facto partner.

This point should be checked carefully. Family arrangements, joint purchases, visa status, trusts, companies, and de facto relationships can make the position more complicated than it appears.

For temporary visa holders, overseas buyers, and foreign-owned companies, approval will commonly be required before acquiring residential land in Australia.

The Type of Property Matters

The most important question is often not simply “can I buy property in Australia?”

It is: what type of property are you trying to buy?

Residential property is treated differently depending on whether it is an established dwelling, new dwelling, near-new dwelling, or vacant residential land.

Established dwellings

An established dwelling is generally an existing home or apartment that has previously been occupied or sold as a dwelling.

This is the category most people think of when they talk about buying a house or unit. During the temporary ban period, most individual foreign buyers will not be able to purchase an established dwelling unless a specific exception applies.

New dwellings

A new dwelling is generally a property that has been built on residential land but has not previously been sold as a dwelling and has not previously been occupied.

New apartments sold off the plan, or newly completed homes sold for the first time, commonly fall into this category.

New dwellings are treated more favourably because they add to Australia’s housing supply.

Near-new dwellings

A near-new dwelling is a more specific category. It may include a dwelling in a qualifying development that was previously sold by the developer, where the sale did not settle, and where the property has not been occupied for more than 12 months in total.

Near-new dwellings may be treated similarly to new dwellings in some circumstances, but the category is technical. Buyers should not assume a property is “near-new” simply because it is recently built.

Vacant residential land

Vacant residential land can also be technical. It does not simply mean “land with no house currently standing on it.”

Foreign buyers may be able to obtain approval to purchase vacant residential land for the purpose of building a dwelling. However, approvals for vacant land usually come with conditions requiring the buyer to develop the land within a specified timeframe.

A common trap is assuming that land becomes “vacant residential land” because an existing dwelling has been demolished. That is not necessarily correct. Land that previously had a dwelling on it may still be treated differently, and the current established dwelling restrictions may still be relevant.

The temporary ban on established dwellings

From 1 April 2025 to 31 March 2027, foreign persons are generally restricted from purchasing established dwellings in Australia.

The ban was announced by the Australian Government on 16 February 2025 and is subject to review before the end of the ban period.

For most individual foreign buyers, this is the central issue. If the property is an existing home or apartment that has previously been lived in or sold as a dwelling, it will usually fall within the established dwelling category and will generally not be available during the ban period.

Limited exceptions

The exceptions are narrow. They are mainly directed at circumstances where the acquisition will not reduce Australia’s housing stock, or where the acquisition forms part of a larger commercial or institutional arrangement.

Exceptions may include acquisitions connected with:

• redevelopment that results in a significant increase in housing stock;
• commercial-scale housing arrangements, such as certain Build to Rent developments, retirement villages, aged care facilities, or student accommodation;
• internal reorganisations;
• security interests, such as mortgages held by foreign lenders;
• certain established dwellings that are incidental to a larger commercial transaction; and
• some near-new dwellings that qualify for separate treatment.

For most individual overseas buyers seeking to purchase an existing home to live in or rent out, these exceptions are unlikely to be available.

In practical terms, most foreign buyers should focus on new dwellings, qualifying near-new dwellings, or vacant residential land unless they have received advice that an exception applies.

Buying a new dwelling, near-new dwelling, or vacant residential land

New dwellings, near-new dwellings, and vacant residential land may still be available to foreign buyers, subject to approval.

New and near-new dwellings

Foreign buyers can generally apply for approval to purchase a new or qualifying near-new dwelling.

If approval is granted, the buyer may usually live in the property or rent it out. However, ongoing obligations may still apply, including registration and annual vacancy fee reporting.

There is generally no fixed limit on the number of new or near-new dwellings a foreign person may apply to purchase, provided approval is obtained for each acquisition or the acquisition is otherwise covered by a valid exemption certificate.

Developer exemption certificates

Some developers hold exemption certificates that may allow foreign buyers to purchase certain new dwellings in a development without making a separate individual application, provided the purchase falls within the terms of the certificate.

Before exchanging contracts, the buyer should obtain written confirmation that:

• the developer holds a valid exemption certificate;
• the certificate applies to the particular dwelling being purchased;
• the purchase price is within any applicable limit;
• the buyer is eligible to rely on the certificate; and
• any fees, reporting obligations, or conditions are understood.

In off-the-plan contracts, the buyer may also be required to reimburse the developer for an amount referable to the application fee that would have been payable if the buyer had applied for approval separately. This should be checked before exchange.

An exemption certificate is not a general exemption from the foreign investment regime. It is a form of approval that applies only within its terms.

Vacant residential land

Foreign buyers may be able to obtain approval to purchase vacant residential land, but approval will usually be conditional on development.

Typical conditions may require that:

• at least one residential dwelling is built on the land;
• construction is completed within a specified period, commonly four years from approval;
• evidence of completion is provided to the regulator;
• the land is not sold or transferred before construction is complete; and
• the buyer complies with any other conditions attached to the approval.

These conditions are designed to prevent land banking and ensure that foreign purchases of vacant residential land contribute to Australia’s housing supply.

A buyer who is not ready to build should be cautious about purchasing vacant residential land, because failure to comply with development conditions can lead to penalties or disposal orders.

How the approval process works

For most residential property purchases, applications are lodged through the ATO’s Online services for foreign investors. For individual buyers, accessing the service may require myID/myGov login details and identity verification, which can take time to arrange, particularly where the buyer is overseas.

The application usually requires information about:

• the buyer;
• the buyer’s visa or residency status;
• the property;
• the purchase price;
• the type of residential land being acquired; and
• the intended use of the property.

Do not sign an unconditional contract without advice

The most important practical point is simple:

 

The FIRB condition should be carefully drafted. It should address:

• who is responsible for lodging the application;
• the deadline for lodging the application;
• the timeframe for obtaining approval;
• what happens if approval is refused;
• what happens if approval is granted subject to conditions; and
• whether any deposit is refundable if approval is not obtained.

A standard finance clause or building and pest clause will not typically protect a foreign buyer from FIRB risk.

Application fees can be significant

Application fees are payable when the application is lodged. They are generally not refundable if approval is refused or if the transaction does not proceed.

The fee depends on the type of property and the value of the acquisition. Foreign investment application fees are indexed annually on 1 July, so buyers should confirm the current amount before lodging an application.

As a practical example, using the 2025–26 fee amounts:

• for a new or near-new dwelling with a purchase price up to A$1 million, the application fee is A$15,100;
• for a new or near-new dwelling with a purchase price up to A$2 million, the application fee is A$30,300;
• for an established dwelling, where an exception applies, with a purchase price up to A$1 million, the application fee is A$45,300; and
• for an established dwelling, where an exception applies, with a purchase price up to A$2 million, the application fee is A$90,900.

The higher fee for established dwellings reflects the policy position that foreign purchases of existing housing stock are discouraged.

These fees can materially affect the economics of a purchase. Buyers should understand the likely fee before making an offer, not after the contract is signed.

Ongoing obligations after settlement

FIRB approval is not the end of the process.

Foreign residential property owners may have continuing obligations after settlement. These obligations can include registration, compliance with approval conditions, and record-keeping.

Registering the property

Foreign buyers are generally required to register their property on the Register of Foreign Ownership of Australian Assets within the required timeframe after settlement.

Registration obligations may also apply when the property is sold or when relevant details change.

This is an administrative step, but it is also a legal obligation. It should not be overlooked.

Complying with approval conditions

If approval is granted subject to conditions, those conditions must be followed.

This is particularly important for vacant residential land, where approval may require the buyer to build a dwelling within a specified timeframe and provide evidence of completion.

Failure to comply with approval conditions can result in enforcement action, including penalties or orders requiring the property to be sold.

The vacancy fee

The vacancy fee is one of the most commonly overlooked obligations for foreign residential property owners.

A foreign owner may be liable to pay an annual vacancy fee if the property is not residentially occupied, or genuinely available for long-term rent, for at least 183 days in the relevant vacancy year.

Key points include:

• the vacancy year generally starts when the owner first has the right to occupy the property;
• only occupancy or rental arrangements of at least 30 days generally count towards the 183-day threshold;
• short-term holiday letting will usually not satisfy the requirement;
• the vacancy fee is generally linked to the original application fee; and
• an annual vacancy fee return may need to be lodged even if no fee is payable.

This means a foreign buyer who intends to use the property only occasionally, leave it vacant, or operate it as short-stay accommodation should consider the vacancy fee before purchasing.

Some exemptions may apply, including where the property is unavailable due to substantial repairs or renovations, legal restrictions, long-term medical or residential care, or estate administration. However, even where an exemption may be available, the reporting obligation should still be checked.

The consequences of getting it wrong

The foreign investment rules carry serious consequences.

If approval was required and not obtained, the buyer may be in breach of the foreign investment regime even if settlement has already occurred. The Treasurer may have power to make orders affecting the property, including requiring it to be sold.

Non-compliance can also result in significant civil penalties and, in serious cases, criminal liability.

Common problems include:

• signing an unconditional contract before approval is obtained;
• assuming a property is “new” or “vacant” without checking the legal category;
• relying on a developer exemption certificate without confirming it applies;
• failing to comply with development conditions for vacant land;
• failing to register the property after settlement;
• failing to lodge annual vacancy fee returns; and
• assuming that short-term letting avoids vacancy fee issues.

These risks are not just technical. They can affect whether the purchase can proceed, whether the buyer keeps the property, and whether significant additional costs arise.

The ATO and Treasury have also announced increased compliance activity in relation to foreign residential property ownership, including land banking concerns involving vacant residential land.

Contact Us

Buying residential property in Australia as a foreign person requires careful planning, particularly given the current restrictions on established dwellings.

Whether you are a foreign buyer, an Australian seller dealing with a foreign purchaser, or a family member assisting with a purchase, our team can help you understand whether approval is required, how the application process works, and how to structure the contract safely.

Call (07) 5532 3199 or submit an online enquiry.