Australian property has been a popular destination for foreign investors for many years. But buying property as a foreign buyer comes with extra rules and regulations that you'll need to follow. The Foreign Investment Review Board (FIRB) oversees foreign property purchases and has its own application process.
Can foreigners buy property in Australia?
Yes. Non-Australians can buy property in Australia as investments. In Australia, foreign property purchases are regulated by FIRB (meaning foreign buyers must apply for approval through the FIRB before buying residential real estate) and there are limitations in place.
According to the FIRB website:
"The Government's policy is to channel foreign investment into new dwellings, as this creates additional jobs in the construction industry and helps support economic growth. It can also increase government revenues, in the form of stamp duties and other taxes."
In other words, Australia's foreign property investment rules encourage foreign buyers to purchase new buildings and therefore stimulate the construction of new housing.
In December 2023, the government tripled the fees for foreign investors of established homes and doubled the penalties charged if a property is left vacant. At the same time it cut application fees for foreign buyers in Build to Rent projects in an attempt to support more rental properties in Australia.
Purchasing new vs established dwellings
It's much easier for foreign investors to buy new buildings or vacant land (provided you construct a property on the land) than it is to buy an established property.
You will need to apply through FIRB, but there's much less scrutiny if you buy:
New buildings. There are generally no conditions attached when purchasing a new dwelling.
Vacant land. If buying vacant land, the main condition is that you need to complete construction of a dwelling on the land within 4 years. You can't just buy vacant land and hold it indefinitely.
It's a different story with established dwellings (buildings that are not new). Foreign investors can't get approval to buy established dwellings except in the following cases:
Buying a home to live in as a temporary resident. You have to sell it once you leave, unless you become a permanent resident or citizen.
Buying an established dwelling to demolish it and develop more dwellings. Because the aim of the foreign investment regime is to encourage new housing construction, you can apply to purchase an existing dwelling if you're planning to demolish and build new housing. The condition is that you must build and supply additional new housing, ie. replace 1 house with 3 townhouses.
How does the FIRB application process work?
Before you apply for approval to purchase an investment property, it's recommended that you obtain expert legal advice to make sure you understand and comply with all the necessary legal requirements. Then you can follow the steps below to apply for foreign investment approval:
Check the FIRB website to read the guidance and check if you need FIRB approval.
Visit the ATO website and click on "Start your application".
Fill out the application form with your contact details, passport, visa documents and any previous FIRB application reference numbers.
Provide the address and title details of the property you wish to purchase.
Read and sign the declaration.
Submit the application and pay the relevant fee.
A decision on your application is usually made within 30 days and you will be informed of that decision within 10 days.
Application fees:
The new fees have not been published since the December 2023 announcement that application fees would be tripled. Assuming the fees will be tripled exactly, the new fees are below alongside the previous fees.
You must obtain approval from the FIRB before you can apply for a home loan with an Australian lender. Fees are payable at the time of lodging your application.
Finder survey: What do Australians from different states care about most when choosing an investment loan?
Response
WA
VIC
SA
QLD
NSW
Interest rate
5.79%
2.97%
3.23%
5.99%
4.89%
Ability to split loan
0.83%
0.61%
Interest only repayments
0.83%
1.65%
0.46%
0.61%
The lender
0.83%
0.46%
Offset account
0.99%
0.46%
1.22%
Extra repayments
0.33%
1.08%
0.92%
1.53%
Fast approval process
0.46%
0.31%
Other
0.46%
Source: Finder survey by Pure Profile of 1112 Australians, December 2023 Data for ACT, NT, TAS not shown due to insufficient sample size. Some other states may also be excluded for this reason.
Penalties for breaking rules on foreign investment
There are serious potential penalties for breaching Australia's rules on foreign investment. Acquiring property without FIRB approval can involve hefty fines or time in prison.
There are higher penalties for foreign companies breaching these rules.
Home loan restrictions
If you need a home loan to cover your purchasing costs it's important to compare loans and lenders carefully. Many Australian lenders impose tighter lending criteria on foreign buyers. This can include:
A lower loan-to-value ratio (LVR). LVR refers to your deposit size relative to the price of the property. You may need a larger deposit (around 30-40%) to qualify for a mortgage.
A higher interest rate. A lender may only offer a loan for your investment with a higher interest rate than the lowest rates on the market.
Restrictions on foreign income. Some lenders won't accept loan applications from temporary residents unless they earn an income in Australia.
If you want to get a home loan for your foreign investment you should approach lenders and ask directly about borrowing as a foreign investor. You could also focus on international banks that operate in Australia, such as HSBC or Citi.
Finally, it’s also worth remembering that there are tax implications for investing in Australian property. Any rental income you receive from your investment will need to be declared on an Australian tax return. You will need to pay Capital Gains Tax on any profit you make when selling the property.
What if I’m an Australian resident living abroad?
If you’re an Australian resident temporarily living overseas and you want to buy an investment property in Australia, the good news is that the strict foreign investment laws don’t affect you. You are exempt from needing FIRB approval in a range of circumstances, including if you:
Are an Australian or New Zealand citizen.
Hold an Australian permanent resident visa.
Have a spouse who fits into either of the above categories and the property is being purchased in both names as joint tenants.
However, you’ll need to check whether lending restrictions imposed by the banks will have an impact on your ability to qualify for a home loan. This will depend on your residency status and the lender with which you apply for a loan.
Using foreign income to invest in Australian property is a complex and confusing topic. So it’s recommended that you seek legal and taxation advice to make sure you satisfy all regulatory requirements.
Richard Whitten is a money editor at Finder, and has been covering home loans, property and personal finance for 6+ years. He has written for Yahoo Finance, Money Magazine and Homely; and has appeared on various radio shows nationwide. He holds a Certificate IV in mortgage broking and finance (RG 206), a Tier 1 Generic Knowledge certification and a Tier 2 General Advice Deposit Products (RG 146) certification.
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Hi
I am a temporary resident living and working in QLD – I want to buy an investment property to rent out. I understand this is only possible on a new dwelling, not established property. My question is would I be able to purchase an established dwelling if my sister was also a part owner of the property? My sister is an Australian citizen.
Thank you
Sophie
Foreign buyers can get exemptions when buying property with an Australian citizen if they are married to them or in a de facto relationship. I’m not sure a sibling relationship is accepted in this case. I suggest enquiring with the FIRB directly.
You said foreigners can only buy new buildings and not established ones. I wish to clarify if an apartment unit vacated and not bought since being built is regarded as a new building or not.
An exemption is that the foreigner has a local Australian or PR as joint tenants. Do they have to be spouse? Or just friend?
If you want the latest information and answers to really specific questions about foreign investment I suggest contacting the Foreign Investment Review Board directly.
Hi
Is it possible to refund the fee that was paid to apply for the FIRB, if I am waiting for the application to be approved but somebody else purchase the property before me? In addition, How much total money do I need to pay to apply for the property which is worth around 700,000?
FIRB does offer discretionary refunds of fees on withdrawals of foreign investment applications in relation to the COVID-19 pandemic. If the measures resulted in delays to, or deferrals of, investment decisions that are currently the subject of a foreign investment application, and the applicant decides to withdraw, the FIRB will consider refunding the fee paid.
The fees you need to settle will depend on the value and type of action being taken, and whether special fee rules apply. You may use FIRB’s fee estimator once it’s available on their page for reference or you can email them at firbenquiries@treasury.gov.au to get an estimate.
I suggest getting in touch with FIRB to inquire about a refund.
is it possible for an individual on student visa to buy a property in australia? for instance,the property worth is six hundred thousand dollars,how much will i be elijible to deposit and how do i get a morgage from the bank to pay up?
Yes, student visa holders are allowed to purchase one established dwelling provided they’re granted permission to do so by the FIRB (Foreign Investment Review Board). Get more insights on how to get FIRB approval here.
Non-Resident students can typically borrow up to 80% of the purchase price thereby requiring a 20% deposit plus costs. Kindly visit our guide on Home loans for temporary residents of Australia for tips on how to obtain a loan.
You can also consider consulting a mortgage broker, to discuss the type of home loan that will complement your borrowing needs.
This depends on your state and territory and also what kind of exemption you’re talking about. If your property is your main residence, then transferring between spouses usually means you are exempt from stamp duty.
But you should probably consult a tax professional or conveyancer to get a more definite answer.
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Hi
I am a temporary resident living and working in QLD – I want to buy an investment property to rent out. I understand this is only possible on a new dwelling, not established property. My question is would I be able to purchase an established dwelling if my sister was also a part owner of the property? My sister is an Australian citizen.
Thank you
Sophie
Foreign buyers can get exemptions when buying property with an Australian citizen if they are married to them or in a de facto relationship. I’m not sure a sibling relationship is accepted in this case. I suggest enquiring with the FIRB directly.
You said foreigners can only buy new buildings and not established ones. I wish to clarify if an apartment unit vacated and not bought since being built is regarded as a new building or not.
An exemption is that the foreigner has a local Australian or PR as joint tenants. Do they have to be spouse? Or just friend?
Hello Billy,
If you want the latest information and answers to really specific questions about foreign investment I suggest contacting the Foreign Investment Review Board directly.
Sorry we can’t be more helpful.
Richard
Hi
Is it possible to refund the fee that was paid to apply for the FIRB, if I am waiting for the application to be approved but somebody else purchase the property before me? In addition, How much total money do I need to pay to apply for the property which is worth around 700,000?
Hi Linda,
FIRB does offer discretionary refunds of fees on withdrawals of foreign investment applications in relation to the COVID-19 pandemic. If the measures resulted in delays to, or deferrals of, investment decisions that are currently the subject of a foreign investment application, and the applicant decides to withdraw, the FIRB will consider refunding the fee paid.
The fees you need to settle will depend on the value and type of action being taken, and whether special fee rules apply. You may use FIRB’s fee estimator once it’s available on their page for reference or you can email them at firbenquiries@treasury.gov.au to get an estimate.
I suggest getting in touch with FIRB to inquire about a refund.
Kind regards,
Richard
is it possible for an individual on student visa to buy a property in australia? for instance,the property worth is six hundred thousand dollars,how much will i be elijible to deposit and how do i get a morgage from the bank to pay up?
Hi AK,
Yes, student visa holders are allowed to purchase one established dwelling provided they’re granted permission to do so by the FIRB (Foreign Investment Review Board). Get more insights on how to get FIRB approval here.
Non-Resident students can typically borrow up to 80% of the purchase price thereby requiring a 20% deposit plus costs. Kindly visit our guide on Home loans for temporary residents of Australia for tips on how to obtain a loan.
You can also consider consulting a mortgage broker, to discuss the type of home loan that will complement your borrowing needs.
Kind regards,
Richard
What are the exemptions for tenants in common? One purchaser is an Australian citizen and the other a permanent resident (not spouses)
Hello JL,
This depends on your state and territory and also what kind of exemption you’re talking about. If your property is your main residence, then transferring between spouses usually means you are exempt from stamp duty.
But you should probably consult a tax professional or conveyancer to get a more definite answer.
Kind regards,
Richard