Restrictions on foreigners buying property in australia explained

A sun-soaked beaches, a vibrant lifestyle, and a potentially booming property market – Australia might just be your investment dream come true. 

And beyond this attractiveness of barbecues and stunning scenery lies the potential for serious financial gain. 

Australian real estate entices investors with the possibility of both capital growth (property value appreciation) and solid rental yields, especially in major cities like Sydney, Melbourne, and Brisbane. 


There’s more to the story.

Central to the regulation of foreign investment in Australian property is the Foreign Investment Review Board (FIRB). The FIRB is a governmental body that assesses applications from foreign persons looking to invest in Australian real estate to ensure such investments align with the national interest. The primary aim is to direct foreign investment towards new property developments and boost the construction sector by supporting economic growth without disadvantaging Australian homebuyers.

So who qualifies as a foreign investor?

The first step is understanding if you qualify as a foreign investor. Here’s a breakdown of the two main categories:

  • Non-Residents: This applies to individuals who don’t live in Australia and aren’t citizens or permanent residents. For you, buying property typically requires approval from the FIRB. This government agency ensures foreign investments align with Australia’s interests and generally, non-residents can only buy new properties or undeveloped land.
  • Temporary Residents: This includes folks in Australia on temporary visas, like students or those on work assignments. You can buy property, but there are limitations. Usually, you’re restricted to new dwellings or established properties you’ll actually live in. And, when your visa expires, the property needs to be sold unless you become a permanent resident or citizen.

So what exactly can you, as a foreign investor, buy?

Types of properties foreign investors can buy in australia

There are some specific types of properties that the government favors for foreign investment.
foreign Investment Property

New buildings and off-the-plan properties

Australia wants to see its housing market grow, and that’s where you come in! The government encourages foreign investors to focus on new constructions or “off-the-plan” properties (those still under development). Why? Because these investments directly create new housing stock, stimulating the construction industry and creating jobs.

Imagine you’re a foreign investor with your eye on a new apartment in Melbourne’s CBD. The price is AUD $500,000, and you’d need to apply for FIRB approval. If approved, your investment would add to the available housing supply without competing with everyday Australians looking for a place to live.

Vacant land with construction commitments

Investing in vacant land is another option, but there is a catch. You’ll need to commit to developing the property within a specific timeframe (usually four years). This ensures your investment leads to new construction and improvements, further boosting the economy and housing supply.

For instance, let’s say you purchase a plot of vacant land in Brisbane with the intention of building a duplex. After the FIRB application process is approved, you’ll need to break ground within four years and notify the FIRB upon completion, proving the development is complete.

Firb approval process

Investing in Australian property as a foreigner involves more than just finding a great place. There’s an approval process managed by the FIRB to ensure your investment aligns with Australia’s interests.

Step-by-step guide on how to apply for firb approval

Do you need approval?

Not all foreign property purchases require FIRB approval. Generally, non-residents (people who don’t live in Australia and aren’t citizens or permanent residents) need approval for new properties or vacant land. Temporary residents (on visas) might be able to buy existing properties, but there are conditions. Always double-check the latest FIRB guidelines to be sure.

Gathering your document

Once you’ve confirmed you need approval, it’s time to gather your documents. This typically includes things like your passport, details about the property you’re interested in, and proof of your financial stability. It is basically putting together a convincing case for why you’re a great investment partner for Australia.

The cost of approval

There’s a fee associated with your FIRB application, and it varies depending on how much the property costs. For properties valued up to AUD $1 million, the fee starts at AUD $6,350. The more expensive the property, the higher the fee.

Approval timelines

After submitting your application with all the necessary documents and fees, FIRB usually responds within 30 days.

Tip: Include a condition in your purchase contract that makes the sale contingent upon FIRB approval. This protects you in case you haven’t received approval by the time you sign the contract.



With $65,000 in savings or equity, you can begin or grow your investment portfolio with high-growth properties in Australia's strongest property markets.

Breakdown of costs involved in buying property as a foreigner

Before you dive in, it’s important to understand the additional costs involved for foreign investors. Let’s break it down.

Firb application fees

There’s a fee associated with your application, and it depends on the property value. As mentioned earlier, for properties priced up to AUD $1 million, the fee starts at AUD $6,350. The more expensive the property, the higher the fee.

Stamp duty surcharges

Foreign investors pay an additional stamp duty on top of the standard rates. For example, in New South Wales, there’s an 8% foreign buyer surcharge on the property value, which gets added to the regular stamp duty.

Land tax for absentee owners

If you’re a foreign property owner who doesn’t live in Australia, you might also face absentee owner land tax surcharges. This surcharge varies by state and can be significant, adding to your annual property ownership costs.


Let’s say you’re a foreign investor buying a property in Victoria for AUD $800,000. Here’s a breakdown of what you might pay:

  • Property Price: AUD $800,000 (this is the big one!)
  • FIRB Application Fee: Around AUD $6,350
  • Stamp Duty: AUD 55,000 (base rate) + AUD 64,000 (foreign buyer surcharge) = AUD 119,000
  • Absentee Owner Land Tax Surcharge: This could vary, but let’s say it’s 1.5%, which would be AUD 12,000 annually.

So, all those upfront costs, excluding the property price itself, could add up to more than AUD $137,350. And on top of that, there are ongoing annual costs like the absentee owner land tax.

The role of taxes

Capital gains tax (cgt)

When you eventually sell your property, any profits you make are subject to capital gains tax. This tax is calculated by subtracting the purchase price and associated costs from the final sale price. The resulting profit is then added to your taxable income. However, unlike Australian residents, foreign investors don’t qualify for a capital gains tax discount, which means you might pay a bit more.

Rental income tax

Any rental income you earn from your Australian property is also taxable in Australia. Non-residents typically face a higher starting tax rate on this income compared to residents, and there’s no tax-free threshold. The key here is to be responsible – declare this income in your annual tax returns and follow the Australian Taxation Office’s guidelines.

Beyond taxes: legal considerations for foreign investors

Owning property in Australia involves more than just tax implications. Here are some legal hurdles to keep on your radar:

  • FIRB Approval: Remember that FIRB approval is mandatory for certain types of property purchases by foreign investors. Make sure you understand the process and get the green light before you move forward.
  • Local Laws and Regulations: You’ll need to comply with local laws regarding property ownership, zoning regulations, and rental agreements.


The Australian property market offers exciting opportunities, but it also has a complex regulatory environment for foreign investors. Understanding and complying with FIRB regulations is crucial to avoid roadblocks and potential penalties. Do your research, plan thoroughly, and consider seeking guidance from experienced professionals.

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