Buying property in Australia as a foreigner (2026)

Who can buy — and who cannot

Every property purchase by a foreign person in Australia requires approval from the Foreign Investment Review Board (FIRB). There are no exceptions based on nationality, investment size, or intended use. FIRB is not a rubber stamp — it is a screening process administered by the Australian Taxation Office (ATO), and it comes with fees, conditions, and enforcement.

What you can buy depends on your status:

• Foreign nationals (non-residents): can buy new dwellings, off-the-plan apartments, and vacant land (if you build within four years). Since April 1, 2025, established (existing) homes are banned entirely — see Part 2.
• Temporary visa holders: can buy one established dwelling as a principal residence, plus new/off-plan without that restriction. Must sell when the visa expires — see Part 7.
• New Zealand citizens: treated the same as Australian citizens for property purposes. No FIRB approval needed regardless of property type.
• Permanent residents: treated as Australian. No FIRB required.

The established home ban (April 2025)

From April 1, 2025 through March 31, 2027, foreign nationals cannot purchase established (existing) residential dwellings in Australia. This is a blanket prohibition, not a tightening of conditions — applications are simply not accepted.

The ban was introduced as part of the government's response to Australia's housing affordability crisis. A review will occur before March 2027 to decide whether to extend, modify, or let it expire.

Exceptions to the ban

• Redevelopment projects that will add 20 or more additional dwellings to existing stock
• Commercial-scale housing: retirement villages, student accommodation, build-to-rent developments
• Worker housing for the Pacific Australia Labour Mobility (PALM) scheme
• Joint purchase with an Australian or NZ citizen spouse (the property must be the principal residence)
• Temporary visa holders: one established dwelling as principal residence only (existing rule, not an exception to the ban per se)

FIRB approval process and fees

Applications go to the ATO (which administers FIRB on behalf of the Treasurer). Processing takes approximately 30 days, though complex cases can take longer. You must have FIRB approval before exchanging contracts.

Fees are non-refundable and scale with property value:

Approvals come with conditions. Standard conditions include:

• Vacancy condition: the property must not be left unoccupied or not genuinely available for rent for six or more months in any 12-month period
• Construction condition (vacant land): building must commence within four years of approval
• Reporting requirements: annual vacancy fee declarations to the ATO

Violations of conditions can result in civil penalties, infringement notices, and forced divestment (the government orders you to sell).

State surcharges — the real cost shock

FIRB fees are the small part. The large costs come from state and territory surcharges that foreign buyers pay on top of standard stamp duty and land tax. Each state sets its own rates.

These surcharges stack on top of the standard stamp duty, which itself runs 4–5.5% depending on the state and property value. A foreign buyer purchasing in NSW or Victoria pays roughly 12–13% in stamp duty alone before any other costs.

The full cost stack

What does a foreign purchase actually cost in total? Here is a worked example for a $1,000,000 new apartment in Sydney (NSW):

That is roughly 14% on top of the purchase price before the property generates a single dollar of return. Add the annual vacancy fee (equal to the FIRB fee) if you do not occupy or rent it, plus the annual land tax surcharge of 4% in NSW.

Compare this to a domestic Australian buyer purchasing the same property: they pay ~$40,000 in stamp duty and ~$3,000 in legal fees. The foreign surcharge triples the transaction cost.

Taxes for foreign owners

Rental income

Non-residents pay tax on Australian-sourced rental income with no tax-free threshold. The first dollar of net rental income is taxed at 32.5% (the non-resident rate), rising to 37% above $120,000 and 45% above $180,000. Tenants or property managers must withhold tax under the PAYG withholding system for payments to non-resident landlords.

Capital gains

Foreign residents do not receive the 50% CGT discount on properties held for more than 12 months. This discount was removed for foreign residents in the 2012–13 budget. A foreign owner selling a $1M property purchased for $800K pays CGT on the full $200K gain at marginal rates, while an Australian resident would pay on $100K.

Annual land tax

In addition to the foreign surcharge detailed in Part 4, standard land tax applies in all states except the Northern Territory. Rates vary by state but are typically progressive, starting from 0% below a threshold and rising to 1.5–2.5% on higher land values.

Vacancy fee

Foreign owners who leave a residential property unoccupied or not genuinely available for rent for six or more months in any 12-month period must pay an annual vacancy fee equal to the FIRB application fee. On a $1M property, that is $14,100 per year. The ATO requires annual vacancy fee returns.

Withholding on sale

When a foreign resident sells Australian real property valued at $750,000 or more, the buyer must withhold 12.5% of the purchase price and remit it to the ATO. This is not the tax itself — it is a prepayment toward the eventual CGT liability, reconciled when the seller files a tax return. It does, however, significantly affect cash flow at settlement.

Temporary residents

Holders of a temporary visa (student, work, business) occupy a middle category with specific rules:

• One established dwelling as a principal place of residence — FIRB approval required, and the property cannot be rented out
• Must sell within three months of the visa expiring or ceasing to be the principal residence
• New dwellings and off-plan purchases are allowed without the one-property restriction, subject to FIRB approval
• Vacant land for new construction is allowed, with the four-year build requirement

If a temporary resident is married to or in a de facto relationship with an Australian or NZ citizen, and they are buying a joint principal residence, different rules apply — the purchase may be exempt from FIRB approval depending on the ownership structure.

Where foreigners are buying

Given the new-dwelling requirement, foreign investment concentrates in markets with significant new development activity:

• Sydney: the largest share of foreign residential investment. New apartment developments in the CBD, inner west, and eastern suburbs attract the most FIRB applications. Prices are the highest in Australia, with median apartments above $800K in desirable areas.
• Melbourne: historically the second-largest market for foreign buyers. Inner-city off-the-plan apartments in Southbank, Docklands, and the CBD remain popular, though Victoria's 8% stamp duty surcharge and 4% land tax surcharge make it the most expensive state for foreign ownership costs.
• Brisbane: growing share of foreign investment, driven by lower entry prices and infrastructure development ahead of the 2032 Olympics. Queensland's 2% land tax surcharge (vs. 4% in NSW and Victoria) is a relative advantage.
• Gold Coast: resort-style apartments and new developments attract buyers who want lifestyle property with rental yield during absence.

The common path: off-the-plan apartments from developers who handle the FIRB application as part of the sales process. This is the path of least resistance for most foreign buyers — the developer applies for a blanket FIRB approval covering all foreign purchasers in the development, reducing the individual buyer's paperwork.

Airbnb & short-term rental rules

State-by-state regulation. Foreigners with FIRB-approved property can operate STR under the same state rules as domestic owners.

• NSW: 180-day cap (Byron Shire: 60 days). Mandatory STRA register. Penalties: up to $11,000 for strata breach.
• Victoria: 7.5% short-stay levy on bookings under 28 days (from January 2025). Strata can ban STR via 75% vote.
• WA: 90-day cap in Perth metro. Mandatory register. Fines up to $20,000 for operating unregistered.
• ACT: 5% levy on bookings under 28 days (from July 2025).

All STR income must be declared to the ATO. Platforms auto-report to tax authorities. Standard home insurance excludes STR — specialist cover required.