Foreign purchasers - FED

Ban on foreign purchasers buying established dwellings

Between 1 April 2025 and 31 March 2027, foreign purchasers are precluded from buying an established residential dwelling in Australia, unless an exemption applies. This includes persons with temporary visas and foreign-owned companies. A foreign person is defined in s 4 of the Foreign Acquisitions and Takeovers Act 1975. See Guidance Note 2 Key Concepts published by The Treasury for further information. A foreign person can include individuals, corporations, trusts, and other entities. The ban does not apply to newly constructed or off-the-plan properties. However existing restrictions for foreign purchasers continue to apply. The ban applies to individuals holding temporary visas, who were previously allowed to purchase existing dwellings if they studied or worked in Australia and were approved by the Foreign Investment Review Board (FIRB). Such applications to the FIRB will no longer be approved. Where a foreign purchaser has a Foreign Investment Review Board approval or exemption certificate issued before 1 April 2025, they can rely on it.

Exemptions

Exemptions to the ban mean that purchases are permitted:

• by permanent residents;
• by New Zealand citizens;
• by spouses, as joint tenants, if one of them is an Australian citizen, permanent resident, or New Zealand citizen;
• for investments that significantly increase housing supply or support the availability of housing supply; and
• for properties intended for accommodation under the Pacific Australia Labour Mobility (PALM) scheme.

Issues to consider

Legal representatives need to be satisfied that foreign purchasers are aware of the consequences of contracting to buy an established dwelling if an exemption does not apply. The ATO will enforce the ban through enhanced screening of foreign investment proposals for residential properties, and penalties apply to breaches. The Government will fund the ATO from 2025-26 financial year to enforce the ban.

Publication updates

By Lawyers Conveyancing publications in all states have been updated, including the commentaries in the Purchase of Real Property guides and 1001 Conveyancing Answers. They include in-depth information on determining who is a foreign person and whether exemptions from the ban apply.