Can foreigners buy property in Australia easily?

Authored by the expert who managed and guided the team behind the Australia Property Pack

Everything you need to know before buying real estate is included in our Australia Property Pack

Who is the author of this content?

BAMBOOROUTES

A team specialized in real estate investing in APAC countries (Japan, Thailand, Indonesia, Australia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Australia. If you'd like to learn more about us, you can check our presentation page.

Can foreigners legally buy property in Australia without being residents or citizens?

Yes, foreigners can legally buy property in Australia without being residents or citizens, but they must comply with strict Foreign Investment Review Board (FIRB) regulations.

Non-residents and temporary residents are permitted to purchase Australian property, but the process requires mandatory government approval before any transaction can proceed. The Australian government maintains tight control over foreign property investment through the FIRB framework, which applies to virtually all purchases by non-citizens.

However, there's a crucial distinction between what's legally possible and what's practically available. While foreign buyers have legal rights to purchase property, their options are severely limited to specific property types, and the current federal policy has temporarily banned foreign purchases of established homes from April 2025 to March 2027.

It's something we develop in our Australia property pack.

Foreign buyers must also understand that legal eligibility doesn't guarantee approval, as FIRB assesses each application based on national interest criteria and compliance with Australia's housing policies.

Do foreign buyers need approval from the Foreign Investment Review Board (FIRB) before purchasing?

Yes, foreign buyers must obtain FIRB approval before purchasing any Australian property, and this approval is mandatory regardless of the property value or type.

The FIRB approval process requires foreign buyers to submit a detailed application that includes personal information, financial details, property specifics, and intended use plans. Applications must be submitted before signing any purchase contract, or alternatively, contracts can be made conditional on FIRB approval to protect both parties.

FIRB evaluates applications based on Australia's national interest, housing policy objectives, and compliance with foreign investment rules. The approval is property-specific, meaning if you want to buy multiple properties, you need separate approvals for each purchase.

Purchasing property without FIRB approval when required is illegal and can result in forced divestment, substantial penalties, and criminal charges. The penalties can include fines up to AUD 3 million for individuals and forced sale of the property at potentially unfavorable market conditions.

Processing times typically range from 30 to 60 days, though complex applications or those requiring additional documentation can take longer, especially during peak application periods.

What types of properties are foreigners allowed to buy in Australia, such as new builds or existing homes?

Foreigners are primarily restricted to purchasing new dwellings, off-the-plan properties, and vacant land for development, with existing homes largely prohibited.

The current federal ban on foreign purchases of established homes runs from April 2025 to March 2027, with very limited exceptions for redevelopment projects that significantly increase housing stock. New builds and off-the-plan properties remain the primary options for foreign investment in Australian residential real estate.

Are there restrictions on foreigners buying land, and if so, what conditions apply?

Foreign buyers can purchase vacant land in Australia, but they must commit to commencing residential construction within four years of settlement.

The construction commitment is legally binding and requires foreign buyers to provide proof of building completion to FIRB within the specified timeframe. Failure to meet this requirement can result in enforcement action, including forced divestment and penalties.

Agricultural land purchases by foreigners face different and more stringent restrictions, with lower dollar thresholds triggering FIRB review and approval requirements varying based on the buyer's country of origin and bilateral investment agreements.

For residential vacant land, the development must increase Australia's housing stock, meaning the construction cannot simply be for personal recreational use without adding dwelling capacity. The property must contribute to addressing Australia's housing supply challenges.

FIRB monitors compliance through regular reporting requirements, and property owners must provide progress updates and completion certificates to demonstrate they've fulfilled their development obligations.

Don't lose money on your property in Australia

100% of people who have lost money there have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.

Download Now

How much are the government application fees and taxes specifically for foreign buyers?

FIRB application fees for foreign buyers start at AUD 14,100 for residential properties valued up to AUD 1 million, with fees increasing substantially for higher-value properties.

The fee structure scales progressively with property value, meaning luxury property purchases can incur FIRB fees of tens of thousands of dollars. These fees are non-refundable, even if the application is rejected or the buyer decides not to proceed with the purchase.

Beyond FIRB fees, foreign buyers face significant additional taxes including stamp duty surcharges that vary by state, typically adding 7-8% to the standard stamp duty rates. For example, in New South Wales, foreign buyers pay an additional 8% surcharge on top of the regular stamp duty, while Victoria imposes an 8% foreign buyer duty.

It's something we develop in our Australia property pack.

Capital gains tax also applies to foreign sellers at potentially higher effective rates, with stricter withholding requirements that can impact cash flow when selling the property.

What extra stamp duty surcharges do foreign investors pay in different states of Australia?

Foreign investors face substantial stamp duty surcharges across Australia's major states, with additional charges ranging from 7% to 8% on top of standard stamp duty rates.

These surcharges are calculated on the total property purchase price and are paid at settlement in addition to the standard stamp duty that all buyers pay. The surcharges represent a significant cost that foreign buyers must factor into their investment calculations and budget planning.

Some states also impose annual foreign owner land tax surcharges, creating ongoing costs beyond the initial purchase surcharges.

Are there minimum investment amounts or price thresholds foreigners must meet to buy property?

Australia does not impose a specific minimum investment amount for residential property purchases by foreigners, but FIRB application fees increase with property values, effectively creating cost barriers for lower-value purchases.

While there's no official minimum purchase price, the substantial fees and surcharges make smaller property investments economically challenging. The base FIRB fee of AUD 14,100 for properties up to AUD 1 million represents a significant percentage cost for lower-value properties.

For commercial and agricultural land, different thresholds apply based on the buyer's country of origin, bilateral investment treaties, and the specific sector involved. These thresholds can range from AUD 15 million to several hundred million depending on the circumstances.

The practical minimum investment consideration should factor in FIRB fees, stamp duty surcharges, legal costs, and ongoing compliance requirements, which can easily add AUD 100,000+ to the total investment cost for a typical metropolitan property purchase.

Foreign buyers should also consider that financing requirements typically demand larger deposits (20-30%), further increasing the practical minimum investment threshold.

Can foreigners qualify for an Australian mortgage, and what deposit percentages are typically required?

Foreigners can qualify for Australian mortgages, but lending options are limited and deposit requirements are significantly higher than for local buyers.

Most major Australian banks have strict policies regarding foreign buyer lending, with many requiring minimum deposits of 20-30% of the property value compared to the 5-10% often available to Australian citizens and permanent residents.

The lending assessment process for foreign buyers involves extensive documentation including overseas income verification, employment history, credit checks from the buyer's home country, and demonstration of ongoing ability to service the loan from offshore income sources.

Interest rates for foreign buyers are typically higher than standard rates, and loan-to-value ratios are more conservative. Some banks may require additional security or guarantees, and the range of available loan products is more limited.

Foreign buyers should engage with mortgage brokers who specialize in non-resident lending early in their property search process, as pre-approval can be more complex and time-consuming than for local buyers, potentially affecting their ability to compete in fast-moving property markets.

How long does the approval and purchase process usually take for a foreign buyer?

The complete approval and purchase process for foreign buyers typically takes 3-6 months from initial application to property settlement.

FIRB approval alone requires 30-60 days for standard applications, though complex cases or those requiring additional documentation can extend beyond this timeframe. Applications submitted during peak periods or those involving sensitive sectors may face longer processing delays.

The timeline breakdown typically includes property search and selection (2-8 weeks), FIRB application submission and processing (4-8 weeks), mortgage approval for foreign buyers (4-6 weeks), and settlement process (4-6 weeks), with some activities running concurrently.

Foreign buyers should factor in additional time for document preparation, overseas income verification, currency conversion arrangements, and legal review processes that may not apply to local buyers.

Seasonal factors can affect timelines, with applications often taking longer during December-January holiday periods and March-June financial year-end periods when government processing volumes are higher.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Australia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

Are there annual ownership costs or ongoing fees foreigners should expect after buying?

Foreign property owners in Australia face several annual costs including land tax, council rates, and potential foreign owner surcharges that vary by state.

Land tax is levied annually by state governments based on the total value of land holdings, with some states imposing additional surcharges specifically for foreign owners. For example, New South Wales charges an additional 2% foreign owner land tax surcharge on top of standard land tax rates.

Council rates are annual charges levied by local governments for municipal services, typically ranging from AUD 1,000 to AUD 4,000 annually depending on the property location and value. These rates apply to all property owners regardless of residency status.

Other ongoing costs include property insurance (building and contents), utilities if the property is vacant, property management fees if using rental management services (typically 6-8% of rental income), and maintenance and repairs.

It's something we develop in our Australia property pack.

Can a foreigner rent out the property immediately, or are there restrictions on usage?

Most properties purchased by foreigners can be rented out immediately after settlement, but specific restrictions apply depending on the property type and the buyer's residency status.

Foreign buyers who purchase new dwellings or off-the-plan properties can typically begin renting immediately upon completion and settlement. There are no general restrictions preventing foreign owners from generating rental income from these property types.

However, temporary residents who purchase property as their principal place of residence must live in the property themselves and cannot rent it out to others. When their temporary residency status changes or expires, they must sell the property rather than converting it to an investment property.

Properties purchased as vacant land for development cannot be rented until construction is complete and all required certifications and approvals have been obtained. The land must remain unused for income generation until the development obligations are fulfilled.

Foreign owners should also comply with local tenancy laws, rental property standards, and tax obligations related to rental income, including potential withholding tax requirements for non-resident property investors.

Is selling the property later subject to special rules or higher taxes for foreigners?

Foreign sellers face capital gains tax obligations and potentially higher withholding rates when selling Australian property, along with stricter reporting and compliance requirements.

Non-resident property sellers are subject to capital gains tax on any profit from the property sale, with the Australian Taxation Office requiring withholding of 12.5% of the gross sale proceeds at settlement. This withholding acts as a prepayment toward the final tax liability, which is calculated based on the actual capital gain and the seller's tax rate.

The capital gains tax calculation for foreign sellers doesn't benefit from the 50% capital gains discount available to Australian tax residents who hold property for more than 12 months, potentially resulting in higher effective tax rates on property profits.

Foreign sellers must also comply with additional reporting obligations, including lodging Australian tax returns to finalize their tax position and potentially claim refunds if the withholding amount exceeds their actual tax liability.

While there are no specific restrictions preventing foreign owners from selling their property, changes in foreign investment policy or property market regulations could affect the pool of potential buyers and property values at the time of sale.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. Australian Taxation Office - Types of property a foreign person can buy
2. Properstar - Real estate guides and advice Australia
3. BDO Australia - Understanding foreign property ownership legal requirements
4. Spot On Conveyancing - Can foreigners buy property in Australia
5. Walker Pender - Foreign ownership property Australia
6. Property Buyer - Foreign investment rules March 2025
7. BambooRoutes - Australia real estate foreigner guide
8. Australian Taxation Office - Are you a foreign person buying property in Australia
9. Property Tax Specialists - Non-resident buying property guide
10. Wise - Buying property in Australia guide