Rules for foreigners buying property in Australia in 2025

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.

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 Sydney, Melbourne, 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.

What exactly is banned for foreign buyers under the 2025 rules?

Foreign persons are completely prohibited from buying established dwellings in Australia under the new rules.

Established dwellings include any existing residential property that has been previously occupied or sold. This covers apartments, houses, townhouses, and any other residential property that is not brand new.

The ban applies to all foreign individuals, temporary residents, and foreign-owned companies. Even if you have lived in Australia for years on a temporary visa, you cannot purchase an established property unless you qualify for specific exemptions.

This restriction is comprehensive and affects the vast majority of the Australian residential property market, as most properties for sale are established dwellings rather than new constructions.

When did the ban on foreign purchases of established dwellings start, and how long is it in effect?

The ban officially started on April 1, 2025, and will remain in effect until March 31, 2027.

This makes it a two-year temporary ban, though the government has indicated they will conduct a formal review before the March 2027 expiration date. The review will determine whether to extend, modify, or end the restrictions.

As of September 2025, the ban has been in effect for approximately five months, meaning foreign buyers still have about 18 months remaining under the current restrictions.

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

Why did the Australian government introduce this temporary ban?

The Australian government introduced the ban to address housing affordability and accessibility issues for local buyers.

The primary goal is to ease pressure on the Australian housing market by reducing foreign speculation and competition. Government officials cited concerns about foreign investors driving up property prices and making homeownership less accessible for Australian citizens and permanent residents.

The ban also targets land banking issues, where foreign investors purchase properties but leave them vacant or underdeveloped. This practice reduces the effective housing supply available to local residents.

Additionally, the government wanted to ensure that residential property investment contributes meaningfully to Australia's housing supply rather than just transferring existing stock to foreign ownership.

Which foreign buyers or situations are exempt from the ban?

Several specific categories of foreign buyers and investment situations are exempt from the established dwelling ban.

Exemption Category	Requirements	Example
Large Development Projects	Must generate at least 20 new dwellings	Apartment complex redevelopment
Commercial Housing	Retirement, aged care, or student accommodation	University student housing projects
Build-to-Rent Developments	Commercial-scale rental housing projects	Purpose-built rental apartment buildings
PALM Scheme Housing	Employee housing for Pacific workers	Agricultural worker accommodation
Permanent Residents	Australian permanent residency or NZ citizenship	Permanent residents buying family homes
Joint Purchases	Spouse purchasing with citizen/permanent resident	Mixed-status couples buying together

What rules apply to permanent residents versus temporary residents?

Permanent residents and New Zealand citizens are completely exempt from the foreign buyer ban and face no restrictions on purchasing established dwellings.

Permanent residents can buy any type of residential property in Australia, including established homes, apartments, and investment properties. They are treated the same as Australian citizens for property purchase purposes.

Temporary residents, including students, skilled workers, and other visa holders, are subject to the full ban on established dwellings. They cannot purchase existing residential properties unless they qualify for specific exemptions like large development projects.

However, temporary residents can still apply to purchase new homes, off-the-plan properties, or vacant land, though they must go through the FIRB approval process and meet all development conditions.

What types of properties can foreigners still buy despite the ban?

Foreign buyers can still purchase several types of residential properties despite the established dwelling ban.

New or near-new dwellings remain available to foreign buyers, provided they obtain FIRB approval and meet development conditions. These properties must be genuinely new constructions, not just recently renovated established properties.

Off-the-plan properties are also permitted, allowing foreign buyers to purchase apartments or houses before construction is completed. These purchases require FIRB approval and buyers must ensure construction is actually completed within specified timeframes.

Vacant residential land purchases are allowed for foreign buyers who intend to build residential properties. However, they must obtain FIRB approval and commit to developing the land productively within set timeframes.

Established dwellings can still be purchased if they are part of significant redevelopment projects that will create substantial new housing supply.

What conditions apply to purchasing new homes, off-the-plan properties, or vacant land?

Foreign buyers purchasing new homes, off-the-plan properties, or vacant land must obtain FIRB approval before completing their purchase.

Development conditions require buyers to complete construction within specified timeframes and put the land to productive use. Failure to meet these conditions can result in penalties and forced divestment.

The approval process involves higher scrutiny, with increased audits and compliance enforcement compared to previous years. The Australian Taxation Office conducts regular checks to ensure buyers are meeting their obligations.

Higher application fees apply to all foreign investment applications, and buyers face additional ongoing compliance requirements throughout the development process.

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

What is the approval process for foreign property investment, and who handles it?

The Foreign Investment Review Board (FIRB) and the Australian Taxation Office (ATO) oversee all foreign property investment applications in Australia.

The approval process involves submitting detailed applications that demonstrate eligibility, compliance with exemption criteria, and ability to meet development conditions. Applications require comprehensive documentation about the buyer's identity, financial capacity, and intended use of the property.

Processing times vary depending on the complexity of the application and the type of property being purchased. Simple new dwelling applications may be processed more quickly than complex redevelopment projects.

All applications require payment of significant fees, which have increased substantially under the new rules. These fees are non-refundable even if the application is rejected.

Approved buyers receive conditions that must be met throughout the ownership period, with ongoing reporting requirements to ensure compliance.

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.

What penalties or enforcement measures exist for breaches—like forced divestment or fines?

The Australian government has implemented severe penalties for breaches of foreign investment rules, including forced divestment of illegally purchased properties.

Forced divestment means the government can order foreign buyers to sell their properties if they purchased them in violation of the ban or failed to meet approval conditions. This sale must typically occur within a specified timeframe, often regardless of market conditions.

Significant financial penalties apply to various violations, with fines potentially reaching hundreds of thousands of dollars depending on the property value and nature of the breach.

Enhanced audit and compliance programs target violations and undeveloped land holdings, with the ATO conducting regular inspections and investigations. These audits can result in additional costs for property owners even if no violations are found.

Buyers who fail to develop vacant land or complete construction projects face both financial penalties and potential forced divestment of their properties.

Will the government review or potentially extend this ban after March 31, 2027?

The Australian government has confirmed that a formal review is scheduled before the ban's expiration on March 31, 2027.

This review will assess the ban's effectiveness in achieving its stated goals of improving housing affordability and accessibility for local buyers. The government will examine market data, housing supply impacts, and feedback from industry stakeholders.

Based on the review results, the government may choose to extend the ban beyond March 2027, modify the restrictions, or allow them to expire as originally planned.

As of September 2025, government officials have not indicated their preferred outcome, suggesting the decision will depend heavily on the review findings and housing market conditions at the time.

Foreign investors should prepare for the possibility that restrictions may continue beyond the original two-year timeframe, particularly if housing affordability issues persist.

What additional taxes or fees do foreign buyers face (e.g., vacancy fees, surcharges, stamp duty)?

Foreign buyers face significantly higher costs beyond the standard property purchase price through multiple additional taxes and fees.

1. **Higher FIRB Application Fees**: Foreign investment applications now cost substantially more than before the ban, with fees varying based on property value and investment type.2. **State Stamp Duty Surcharges**: Most Australian states impose additional stamp duty charges on foreign buyers, typically ranging from 7% to 8% above the standard rate.3. **Vacancy Fees**: Properties left unoccupied by foreign owners incur annual vacancy fees, designed to discourage land banking and encourage productive use.4. **Ongoing Compliance Costs**: Regular auditing and compliance requirements can generate significant additional costs throughout the ownership period.5. **Higher Interest Rates**: Many Australian banks charge foreign buyers higher interest rates on property loans, increasing the total cost of ownership.

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

How do you position yourself—strategically and procedurally—if you're a foreigner wanting to buy now or after the ban?

Foreign buyers should focus on property types and investment strategies that remain available under the current restrictions.

Target new construction projects, off-the-plan developments, or significant redevelopment opportunities that meet exemption criteria. These investments often provide better long-term value while complying with current regulations.

Prepare comprehensive documentation for FIRB applications well in advance of any intended purchase. This includes financial records, development plans, and detailed project timelines that demonstrate serious commitment to productive property use.

Factor higher costs and compliance requirements into your investment calculations from the beginning. Budget for increased fees, taxes, ongoing compliance costs, and potential delays in the approval process.

Monitor regulatory developments closely as the March 2027 review date approaches, as rule changes could significantly affect investment strategies and property values in the Australian market.

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 - Banning Foreign Purchases of Established Dwellings
2. HSF Kramer - FIRB Update
3. Australian Taxation Office - Types of Property Foreign Persons Can Buy
4. Treasury Ministers - Albanese Government Clamping Down on Foreign Purchase
5. Holding Redlich - Australia Tightens Foreign Investment Rules
6. BDO Australia - Restricting Foreign Ownership of Housing
7. GGI - Temporary Ban on Foreign Ownership of Housing in Australia
8. MCW Lawyers - Australia Foreign Home Buying Ban