In Australia, foreign nationals cannot buy and sell real estate as freely as in countries such as the US or those in Europe. Before buying property in Australia, a foreign national must apply to Australia’s Foreign Investment Review Board (FIRB) and receive approval before completing a purchase. Buyers considering an Australian property should therefore understand the restrictions on foreign ownership before committing, to avoid inadvertently breaching the law. This article covers what restrictions foreign buyers face when purchasing property in Australia.
Legal Restrictions
Foreign nationals can buy investment property in Australia, but there are rules and requirements governing what type of property an investor may buy. Foreign nationals or non-residents must apply for and receive FIRB approval before buying the investment property they want. According to FIRB documentation, the policy is intended to channel foreign investment into the new-housing market, with the aim of creating jobs in the construction sector and supporting the broader economy, while also increasing government revenue — for example through stamp duty and taxes generated by property purchases. FIRB has stated that the primary principle it generally considers when reviewing an application is whether the investment will add to local housing supply.
Based on this principle, foreign investors may buy the following four types of Australian property:
- New dwellings
- Vacant land*
- Established dwellings*
- Housing for the buyer’s own use*
Other than new dwellings, the other three categories all carry restrictions. A foreign buyer who wants to buy land in Australia must state their development plan when applying to FIRB, and the plan must be to build residential housing — only a plan to complete construction within four years will be approved.
A foreign investor wanting to buy an existing Australian dwelling must at the same time submit a redevelopment plan, and the plan must increase the number of dwellings compared with the existing building in order to be approved — for example, if the existing building is a single detached house, the foreign buyer might rebuild it into two attached townhouses, increasing the dwelling count from one to two.
Of course, if the buyer is already living in Australia but is not a permanent resident, they may buy an existing dwelling for their own use. However, unless the buyer becomes a citizen or permanent resident, they must sell the property once they move out of it.
From 1 April 2025 (extended to 30 June 2029), foreign persons — including temporary residents and foreign-owned companies — are banned from buying established dwellings in Australia, with only very limited exceptions, such as investments that materially increase housing supply or purchases under the Pacific Australia Labour Mobility (PALM) scheme.
A foreign national applying to FIRB must also pay a fee, which depends on the transaction price of the property. Put simply, if a foreign buyer’s transaction price is AUD 75,000 or less, the application fee is AUD 4,500 for a new dwelling or vacant land (2025-26 financial year); for the same price band, an established-dwelling exception case is AUD 13,500. The full fee schedule by price band is set out on the FIRB website.
Financing Restrictions
In Australia, foreign nationals are legally barred from buying resale property except in certain specific circumstances, which also makes it harder to obtain a mortgage for an Australian property. Most lenders’ basic requirement is Australian citizenship or permanent residency, because lenders treat overseas borrowers as higher-risk applicants that most lenders’ systems are not set up to handle well. Lending to a foreign national represents greater risk for the lender. As a result, Australian banks typically apply stricter conditions to mortgages for foreign nationals than for Australian nationals. Foreign investors may need to pay a larger upfront deposit for the property, meaning a lower loan-to-value ratio. Foreign applicants are also usually charged a higher interest rate than on an ordinary loan. In some cases, lenders may also require the foreign applicant to earn income in Australia and provide proof of it.
The FIRB Application
As noted above, a foreign national must obtain FIRB approval before acquiring an interest in Australian property. An interest includes signing an unconditional contract (or gift), or holding an option to buy a property at a set time in the future. If an investor is concerned that the property might be sold to another buyer while their approval is pending, they can make the signed contract conditional on receiving FIRB approval. The FIRB approval process is as follows:
- Go to the FIRB website and click “Apply Now” to begin the application.
- Complete the form with all relevant personal, passport and visa information.
- Provide details of the residential property the applicant wants to buy.
- Sign and submit the application, and pay the applicable fee.
- Wait for a decision. A decision typically takes about 30 days, with a further 10 days for the applicant to be notified of the result.
FIRB: https://firb.gov.au/
Who Is Exempt From Approval
Besides Australian passport holders, several other groups are also not subject to this restriction and do not need to apply.
Buyers who do not need FIRB approval are:
- Australian citizens
- New Zealand citizens
- Holders of an Australian permanent visa
- A foreign national buying property as a joint tenant with a spouse who meets one of the above conditions
Restrictions on Selling
Because foreign nationals are generally restricted to buying new-build property in Australia, this effectively also means that when a foreign owner later comes to sell that property, they will likewise only be able to sell to an Australian.
In Summary
Because of these Australian government restrictions, a foreign owner will, when eventually selling their residential property, only be able to sell to an Australian buyer — though this does not necessarily affect an Australian property’s rental yield or capital growth. Investors are nonetheless advised to consider factors such as local population and the surrounding environment more closely before investing, and to research thoroughly before buying. Anyone with questions about a property should consult a professional, such as a locally licensed solicitor.
Have a question about this guide? Leave a comment below, or ask Zagdim directly.
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