Buying and owning property in Melbourne as a foreigner

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

Yes, the analysis of Melbourne's property market is included in our 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 Melbourne. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At BambooRoutes, we explore the Australian real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Melbourne, Sydney, and Brisbane. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

Can foreigners actually buy property in Melbourne, and how does it differ from what locals or other nationalities can do?

Foreigners can buy property in Melbourne, but face strict restrictions that significantly differ from what Australian citizens and permanent residents enjoy.

From April 2025 to March 2027, foreign buyers are generally banned from purchasing established dwellings. This means existing homes, townhouses, and older apartment buildings are off-limits to most international buyers. The ban applies to all foreign nationals regardless of their country of origin.

Foreign buyers can only purchase new builds, off-the-plan apartments, or vacant land that comes with a development requirement. All these purchases must receive approval from the Foreign Investment Review Board (FIRB) before proceeding with any transaction.

Australian citizens and permanent residents face no such restrictions. They can buy any type of property—established homes, new builds, vacant land, or commercial properties—without requiring government approval. Temporary residents on valid visas can purchase a principal place of residence but must sell if they leave Australia.

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

Do I need a particular visa or residency status to buy or own property in Australia?

No particular visa or residency status is required to buy or own property in Australia, but all non-residents must secure FIRB approval before purchasing.

The definition of "foreigner" relates to residency status rather than citizenship. This means Australian citizens living overseas are still considered residents for property purchase purposes if they maintain their Australian residency. Conversely, foreign nationals living in Australia on temporary visas are classified as foreign buyers.

Foreign buyers can purchase property on tourist visas, student visas, or without any Australian visa at all. However, temporary residents living in Australia can buy one property as their principal place of residence and must sell it if they permanently leave the country.

Buying property with an Australian spouse or permanent resident can reduce complexity, as joint ownership may allow access to properties otherwise restricted to foreigners. The Australian partner's residency status determines the purchasing rights for jointly owned properties.

Do I need to be physically present in Australia to complete the purchase, or can it be handled remotely?

Property purchases in Melbourne can be handled entirely remotely without requiring physical presence in Australia.

The entire process—including property inspections, contract signing, and financial arrangements—can be managed digitally. Virtual property tours, video inspections with local agents, and detailed photography allow buyers to evaluate properties from overseas.

Digital platforms like DocuSign enable electronic contract signing, while the Property Exchange Australia (PEXA) system handles electronic settlement and document lodgement. Bank accounts can often be opened remotely, and mortgage applications can be processed online with proper documentation.

Legal representatives and conveyancers can act on behalf of overseas buyers through power of attorney arrangements. This allows lawyers to sign contracts, handle settlements, and complete property registrations without the buyer being present.

Remote purchasing has become standard practice, particularly since 2020, with most Australian property transactions now incorporating digital processes even for local buyers.

What is the step-by-step process for a foreigner to buy property in Melbourne, and what documents are required at each stage?

The property purchase process for foreigners involves seven key steps, each with specific documentation requirements.

1. **FIRB Approval Application**: Submit online application with passport, proof of identity, property details, and pay fees ranging from AUD 4,200 for properties under AUD 75,000 to AUD 112,800 for properties up to AUD 5 million.2. **Open Australian Bank Account**: Provide passport, additional identity documents, proof of overseas address, and employment verification. Many banks now accept remote applications with certified document copies.3. **Secure Financing** (if needed): Submit proof of income, employment letters, bank statements from home country, visa details if applicable, and property purchase contract for pre-approval from Australian lenders.4. **Engage Legal Representation**: While not mandatory, hiring a lawyer or conveyancer costs AUD 2,000-5,000 and requires providing power of attorney documents, identity verification, and FIRB approval letter.5. **Contract of Sale Preparation**: Legal representative reviews contract terms, conducts title searches, and ensures FIRB approval letter is attached to all sale documentation.6. **Settlement and Registration**: Sign final contracts, pay remaining deposit and settlement amounts, submit transfer documents to Land Titles Office, and complete property registration in buyer's name.7. **Post-Purchase Compliance**: For vacant land purchases, notify FIRB when development commences and when construction is completed within required timeframes.

Is it mandatory to hire a lawyer or conveyancer, or can I handle the legal process on my own?

Hiring a lawyer or conveyancer is not legally mandatory in Victoria, but it's highly recommended due to the complexity of foreign buyer regulations and potential legal risks.

Victoria, New South Wales, and other Australian states allow buyers to handle conveyancing themselves, unlike Queensland and the ACT which legally require professional legal representation. However, self-completion is rare even among experienced local buyers due to the intricate legal requirements.

Foreign buyers face additional complexities including FIRB compliance, understanding foreign purchaser surcharges, capital gains tax implications for non-residents, and ensuring proper contract terms. Legal professionals charge AUD 2,000-5,000 but provide crucial services including contract review, title searches, and compliance verification.

Attempting DIY conveyancing can result in costly mistakes such as missing FIRB approval deadlines, accepting unfavorable contract terms, or failing to identify property title issues. The financial risk of errors typically exceeds professional legal fees significantly.

Professional representation becomes essential when dealing with off-the-plan purchases, complex development approvals, or properties with restrictive covenants that could affect foreign ownership.

What taxes, fees, and costs should I expect when buying, holding, and later selling property in Melbourne as a foreigner?

Foreign buyers in Melbourne face significantly higher costs than local purchasers across all stages of property ownership.

Cost Category	Amount/Rate	When Payable
FIRB Application Fee	AUD 4,200 - AUD 112,800	Before purchase contract
Stamp Duty (Base Rate)	1.4% - 5.5% of property value	At settlement
Foreign Purchaser Surcharge	8% additional in Victoria	At settlement
Legal/Conveyancing Fees	AUD 2,000 - AUD 5,000	At settlement
Land Tax (Annual)	0.2% - 2.25% + foreign surcharge	Annual payment
Vacancy Fee (if applicable)	1% of property value annually	If vacant >183 days/year
Capital Gains Tax	Full income tax rate (no discount)	When selling property

Mortgage deposits typically require 20-30% of property value upfront, compared to 10-20% for Australian residents. Foreign buyers receive no capital gains tax discount and pay full income tax rates on profits when selling, while residents get 50% CGT discount for properties held over 12 months.

Can foreigners get a mortgage from Australian banks, and if so, what rates, conditions, and tips apply to improve approval chances?

Foreigners can obtain mortgages from Australian banks, but face stricter conditions and higher costs compared to local borrowers.

Australian banks typically require 20-30% deposits from foreign buyers, compared to 10-20% for residents. Fewer lenders offer foreign buyer mortgages, limiting choice and potentially increasing rates. Interest rates are generally 0.5-1.5% higher than standard domestic rates.

Required documentation includes proof of overseas income, employment verification, bank statements from home country, tax returns, existing debt information, and FIRB approval letter. A local Australian bank account is usually mandatory before mortgage approval.

Tips to improve approval chances include working with mortgage brokers specialized in foreign buyer loans, maintaining strong credit history in home country, providing comprehensive financial documentation, demonstrating stable employment, and considering lenders with international banking relationships.

Some international banks with Australian operations may offer cross-border financing solutions with more favorable terms for their existing customers. Private banks and non-bank lenders sometimes provide alternative financing options when traditional banks decline applications.

Pre-approval before property hunting strengthens negotiating position and ensures realistic budget expectations given stricter lending criteria.

What are the fiscal implications of owning property in Australia as a foreigner, both locally and in my home country?

Owning Australian property as a foreigner creates tax obligations in Australia and potentially in your home country, requiring careful planning to avoid double taxation.

Australian tax implications include annual land tax payments with foreign owner surcharges, capital gains tax at full income tax rates without resident discounts, and potential vacancy fees if properties remain unoccupied for more than 183 days per year. Rental income is taxable in Australia at non-resident tax rates.

Home country reporting requirements vary significantly by jurisdiction. US citizens must report foreign property ownership and rental income on tax returns. UK residents may need to declare Australian rental income and capital gains. EU residents should check domestic tax laws regarding foreign property ownership disclosure.

Double taxation treaties between Australia and many countries help prevent paying tax twice on the same income or gains. However, non-residents cannot access Australia's main residence capital gains tax exemption, even if the property serves as their primary home.

Professional tax advice from qualified accountants in both countries is essential before purchasing. Proper tax planning can optimize deductions, timing of sales, and utilization of treaty benefits to minimize overall tax burden.

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

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.

Where do foreigners usually prefer to buy in Melbourne, and which areas are best for living, renting out, or long-term capital appreciation?

Foreign buyers in Melbourne typically concentrate their purchases in specific areas that offer strong rental yields, lifestyle amenities, or capital growth potential.

The Melbourne CBD remains the most popular choice for foreign investors, offering high-density apartment buildings, strong rental demand from international students and young professionals, and proximity to employment hubs. Southbank and Docklands attract buyers seeking modern apartment living with water views and convenient transport links.

South Yarra and nearby inner suburbs appeal to foreign buyers looking for premium lifestyle locations with established amenities, restaurants, and cultural attractions. These areas typically offer stronger capital appreciation prospects due to land scarcity and ongoing gentrification.

University precinct areas including Carlton, Parkville, and suburbs near Monash University campuses attract investment focused on student accommodation and rental yield optimization. These locations provide consistent rental demand and lower vacancy rates.

Foreign buyers often target new apartment developments and off-the-plan projects in growth corridors like Footscray, Richmond, and St Kilda, where transport infrastructure improvements support future capital appreciation potential.

Areas near major hospitals, business districts, and transport hubs consistently attract foreign investment due to reliable rental demand and long-term value growth prospects.

What do the latest liveability index, rental yields, rental income data, tourism numbers, and growth forecasts say about Melbourne's property market?

Melbourne consistently ranks among the world's most liveable cities, supporting strong property market fundamentals and international investor confidence.

As of September 2025, Melbourne maintains top-10 global liveability rankings, with particular strengths in healthcare, education, infrastructure, and cultural amenities. This reputation continues attracting international migration, supporting rental demand and property values.

Rental yields for Melbourne apartments average 4-5% annually, with variation by location and property type. Inner-city apartments typically achieve 4-4.5% yields, while outer suburban properties can reach 5-6%. New apartment developments often start with lower yields that improve as areas mature.

Tourism numbers show steady recovery to pre-2020 levels, with international visitor arrivals supporting short-term rental markets in CBD and inner-city areas. Business tourism and international student numbers remain key drivers of accommodation demand.

Growth forecasts for 2025-2027 predict modest but positive capital appreciation of 2-4% annually for Melbourne property, with apartment markets expected to outperform houses due to foreign buyer demand concentration and supply constraints.

Population growth projections show continued international migration supporting rental markets, while infrastructure projects including rail extensions and urban renewal programs create localized growth opportunities.

What is the current price breakdown of properties in Melbourne compared with other Australian cities and regions?

Melbourne's property prices position the city as more affordable than Sydney but premium compared to other major Australian capitals.

As of September 2025, Melbourne's median apartment prices range from AUD 500,000-900,000 in city and prime suburban areas, with outer suburbs and regional properties starting from AUD 350,000. New build apartments favored by foreign buyers typically cost AUD 600,000-1,200,000 depending on location and specifications.

Compared to Sydney, Melbourne offers approximately 15-20% lower prices for equivalent property types and locations. Brisbane and Adelaide properties cost 20-30% less than Melbourne equivalents, while Perth prices are similar for new apartment developments but lower for established properties.

Regional Victorian properties accessible to foreign buyers start from AUD 300,000 for vacant land with development requirements, though these locations offer limited rental yield potential compared to Melbourne metropolitan areas.

Premium Melbourne suburbs command price premiums of 50-100% above outer suburban areas, reflecting proximity to employment, transport, and lifestyle amenities. Waterfront and CBD properties represent the highest price segment, often exceeding AUD 1.5 million for quality apartments.

Foreign buyer restrictions on established properties have created price disparities, with new developments commanding premiums due to limited supply available to international purchasers.

What are the most common mistakes and pitfalls foreigners make when buying property in Melbourne, and how can they be avoided?

Foreign buyers frequently make costly mistakes that can result in financial losses, legal complications, or failed purchases.

1. **Failing to secure FIRB approval before contract signing** - This can result in fines up to AUD 2.55 million and potential criminal liability. Always obtain FIRB approval before making offers or signing purchase contracts.2. **Attempting to buy prohibited property types** - Many foreign buyers try purchasing established dwellings without understanding current restrictions. Stick to new builds, off-the-plan properties, or approved vacant land only.3. **Underestimating total costs and taxes** - Foreign purchaser surcharges, FIRB fees, and additional taxes significantly increase purchase costs. Budget for 15-20% additional costs beyond the property price.4. **Choosing poor locations for rental returns** - Buying in areas with weak rental demand or limited capital appreciation potential. Research local employment, transport links, and development pipeline before purchasing.5. **Inadequate legal and professional advice** - Attempting DIY purchases or using inexperienced lawyers unfamiliar with foreign buyer regulations. Engage qualified professionals with foreign buyer experience.

Additional pitfalls include relying solely on Australian lenders without exploring international financing options, neglecting home country tax implications, and failing to understand vacancy fee obligations that can add significant annual costs.

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

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. Australian Taxation Office - Are you a foreign person buying property in Australia
3. TNS Lawyers - Can foreigners buy properties in Victoria
4. PropertyStar - Real estate guides and advice for Australia
5. Taxes for Expats - Can foreigners buy property in Australia
6. GM Law - Buying a house in Australia as a foreigner
7. Property Tax Specialists - Non-resident buying property in Australia guide
8. Rise Property Buyers - How to buy property remotely using virtual tours and digital contracts
9. Odin Mortgage - How Aussie expats can buy Australian property remotely
10. Wise - Getting a mortgage in Australia