Rules for Foreigners Buying Property in Australia and How Non-Residents Can Invest Safely

Article Highlights

• Foreign buyers face a two-year ban on purchasing established dwellings from 1 April 2025 to 31 March 2027, but can still buy new properties and vacant land.
• The Foreign Investment Review Board approval process requires application fees that depend on property value.
• Non-residents must manage additional costs, including foreign buyer stamp duty surcharges, annual vacancy fees, and stricter lending criteria with lower loan-to-value ratios.

Buying property in Australia as a non-resident isn’t impossible, but it’s definitely more complicated than it used to be. The rules have tightened considerably over the past few years.

Despite that, Australia’s property market remains attractive to international property investors thanks to its stable economy, strong rental yields, and long-term capital appreciation potential. Understanding these rules before you start your search can save you time, money, and considerable frustration.

Legal Frameworks and Rules for Foreigners & Non-Residents Buying Property in Australia

Foreign Investment Review Board (FIRB)

If you’re a foreign person under Australian law, you’ll need approval from the Foreign Investment Review Board before buying most residential property. The definition of “foreign person” is broader than you might think, and can vary by state. It generally includes:

• Foreign citizens who don’t hold permanent residency
• Temporary residents on certain visa types
• Australian citizens who’ve been living overseas and are considered ordinarily resident in another country

The FIRB approval process exists to ensure foreign investment increases Australia’s housing stock rather than competing with locals for existing properties. You need to submit an application and receive written approval before signing an unconditional contract. The application fee varies based on the property’s purchase price.

Ban on Foreign Purchases of Established Dwellings

Here’s where things get tricky for foreign buyers. Between 1 April 2025 and 31 March 2027, the Australian government banned foreign acquisitions of established dwellings. This aims to increase housing supply and reduce competition for existing properties.

An established dwelling is any residential property that’s been previously occupied or sold. If someone’s lived in it before, you can’t buy it as a foreign investor during this period. There are limited exceptions for spouses of Australian citizens buying jointly, court-ordered transfers, and inherited properties, but these are narrow.

The good news? You can still purchase new dwellings and vacant land. A new dwelling is a property that’s never been occupied or sold as a residence. Off-the-plan apartments, newly built houses, and properties under construction all qualify. Vacant land is also available, provided you commit to building a dwelling within four years.

Financial & Eligibility Considerations for Foreigners & Non-Residents to Buy Property in Australia

Residency Status

Your residency status determines what you can and can’t buy.

• Temporary residents on eligible visas (typically work or student visas longer than 12 months) can purchase one established dwelling to use as their home while they’re in Australia, but they must sell it when they leave or if their visa expires.
• Permanent residents are treated the same as Australian citizens. Once you hold permanent residency, you can buy established dwellings, new properties, vacant land, and commercial property without FIRB approval or foreign buyer surcharges.
• New Zealand citizens on a special category visa occupy a middle ground. If you’ve been ordinarily resident in Australia for at least 200 days in the past 12 months, you’re exempt from FIRB requirements. But if you’ve been living overseas, you’re treated as a foreign person.

Tax Implications

Tax implications hit foreign buyers hard. For instance, every state except the Northern Territory and ACT charges a foreign buyer stamp duty surcharge on residential land, and it varies by state. At the time of writing this article, Western Australia’s stamp duty surcharge is 7%. These surcharges apply on top of standard stamp duty, adding tens of thousands of dollars to your purchase costs.

Land tax surcharges also apply in several states. Similar to the foreign buyer stamp duty surcharge, this varies by state. These ongoing costs can erode rental income if you’re not careful with your numbers.

Then, there’s the annual vacancy fee. If your property sits empty for more than 183 days in a year, you’ll pay a vacancy fee equal to the original FIRB application fee. The Australian Taxation Office is actively auditing compliance, so keeping accurate records of occupancy is essential.

Foreign income from rental properties is taxed at non-resident rates, and you’ll need to lodge an Australian tax return each year. Capital gains tax also applies when you sell, and as a foreign person, you won’t qualify for the main residence exemption that locals enjoy.

Lending Criteria

Securing finance as a non-resident is harder than it is for locals. Some lenders won’t touch foreign buyers at all, while others have strict criteria around income verification, credit history, and residency status. A mortgage broker experienced in non-resident lending is invaluable here. They can connect you with lenders who understand your financial situation and offer competitive terms.

How Can I Buy Property in Australia as a Non-Resident?

Before you commit to buying property in Australia as a non-resident, run through this compliance checklist:

1. Confirm your residency status. Are you an Australian citizen, permanent resident, temporary visa holder, New Zealand citizen on a special category visa, or foreign person?
2. Identify the property type. Is it vacant land, a new dwelling, off-the-plan, an existing dwelling, or commercial property?
3. Obtain FIRB approval before signing an unconditional contract if you’re a foreign person buying residential property.
4. Budget for the correct FIRB application fee based on the property’s purchase price.
5. Lodge your Register of Foreign Ownership notice within 30 days of settlement.
6. File an annual vacancy fee return and pay the fee if your property is unoccupied for more than 183 days.
7. Lodge an annual Australian tax return for any rental income, and be prepared for non-resident withholding tax.
8. Understand that capital gains tax applies when you sell, and the main residence exemption won’t be available.

Getting professional advice tailored to your situation is critical. Tax laws, FIRB regulations, and state-based surcharges all interact in complex ways, and mistakes can be expensive.

Our Buyer’s Agents Are Here to Help You Get It Right

The rules for foreigners buying property in Australia are complicated, but they’re not impossible to manage with the right guidance.

At You&Me Personalised Property Services, we specialise in helping international property investors find the right property at the right price, and connect with lenders who understand non-resident finance.

Contact us today and find out how we can help you secure your next investment property with complete peace of mind.