A Guide to Buying a House in Australia as a Non-Resident

Buying a house in Australia has become a popular choice for global investors, reflecting a broader trend in international property investments. Australia stands out as a hotspot, not just for its stable economy and robust real estate market but also for its breathtaking landscapes and natural beauty.

Australia’s property market is very attractive for non-residents, offering strong growth and great opportunities.

However, diving into this venture isn’t always straightforward. You must be well-prepared and informed, especially given the strict regulations set by the Foreign Investment Review Board (FIRB) for foreign persons wanting to buy a house in Australia.

This guide aims to be your starting point, offering crucial insights and information for non-residents eager to navigate the Australian property landscape, including the steps to apply to the FIRB.

Benefits of Investing in Australia 

Before we delve into the intricacies of the regulations surrounding property investment for non-residents, let’s shed light on some of the benefits that the Australian property market offers.

• Potential Rental Yields-Australia’s major cities, such as Sydney, Melbourne, and Brisbane, have consistently demonstrated strong rental yields. Rental property demand is driven by a combination of factors, including a growing population, a steady influx of international students, and a robust job market, all of which contribute to a high demand for rental properties.

• Capital Appreciation-The Australian property market has historically shown resilience and steady growth. Investors can potentially benefit from long-term capital appreciation, especially in sought-after suburbs and regions. The country’s stable economy and proactive government policies further bolster the real estate market, making it a promising avenue for capital growth.

• Diverse Investment Opportunities-From bustling urban centers to serene coastal towns, Australia offers a diverse range of property investment opportunities. Whether you’re looking for a high-rise apartment in the heart of Sydney or a quaint cottage in the countryside, there’s something for every investor’s taste and budget.

Can a Foreigner Buy Property in Australia?

Yes, foreign residents, temporary residents, and short-term visa holders are allowed to buy investment properties and residential real estate in Australia, provided that they’re granted permission to do so by the Foreign Investment Review Board (FIRB).

The FIRB reviews foreign investment proposals on a case-by-case basis. Beyond applying for permission, there are strict rules regarding the type of residential real estate and investment property you can buy.

This is because the Foreign Investment Review Board is responsible for ensuring that most foreign property investment is targeted at new dwellings instead of established dwellings.

The idea is that if non-residents invest in building new properties, then job creation will follow in the construction industry, and the economy will grow – it’s a matter of national interest. Beyond that, the government can gain revenue through stamp duty taxes while ensuring that Australian residents aren’t deprived of property they can purchase and live in.

What Types of Properties Can You Purchase?

The rationale for allowing foreign buyers to purchase Australian property is based on the fact that they can’t buy an established dwelling.

That means that foreign investors can purchase new buildings or vacant land.

• New Buildings-The FIRB defines ‘new buildings’ as property that has not been previously sold as a dwelling and has not been previously occupied. If the developer sold the investment property, it must not have been occupied for more than 12 months.

• Vacant Land-The FIRB approves vacant land purchases subject to a property being constructed within four years of the approval date. Once construction has been completed, proof must be sent to the FIRB within 30 days.

Are There Exceptions to the Established Dwelling Rule? 

Although foreign investors are generally not allowed to purchase established properties, there are three exceptions to this rule.

• Buying an Established Dwelling to Redevelop- Foreign investors can buy an established dwelling provided that they plan to redevelop the property and increase the housing stock. In other words, they’re going to knock the existing property down, replace it, and add an additional dwelling or more onto the land.

So, redevelopment is subject to the condition that more than one additional property has to be built.

There are also time constraints on the redevelopment. The demolition, redevelopment, and construction of the new property must be completed within four years of FIRB approval, and proof must be sent to them within 30 days of the construction being completed.

• Temporary Residents Who Plan to Sell- The second exception applies to a temporary resident buying Australian property. Temporary residents can apply to purchase residential property to reside in, provided that they sell the home once they leave the country. However, if the temporary resident becomes a citizen or permanent resident, they will not have to sell the dwelling.

• Commercial Property- And lastly, the established dwelling rule doesn’t apply to commercial property. The FIRB typically approves commercial investments with less hassle than residential ones. However, the requirement for approval still applies.

Important Update: Temporary Ban on Foreign Buyers of Established Dwellings

As of 1 April 2025, the Australian Government has introduced a two-year ban—effective until 31 March 2027—prohibiting foreign persons (including non-residents, temporary visa holders, and foreign-owned companies) from purchasing established (previously owned) residential properties.

This measure is part of a national effort to improve housing affordability and increase availability for local buyers.

What You Can Still Buy:

• Newly built dwellings (never previously sold or occupied)
• Vacant land (to build a new dwelling, subject to FIRB approval)

The policy is scheduled for review in 2027.

 Exceptions to the Ban:

The following buyers are exempt from this restriction:

• Australian citizens (even if living overseas)
• Permanent residents of Australia
• New Zealand citizens
• Spouses of Australian citizens, permanent residents, or New Zealand citizens, when buying together as joint tenants
• Foreign investments that increase housing supply or directly support housing availability

Note: Temporary residents can still apply to purchase new dwellings or vacant land but must apply for FIRB approval. Limited exceptions apply. Media Release

 

How Does the Foreign Investment Review Board Application Process Work?

Once you’ve familiarised yourself with the FIRB rules around purchasing property as a foreign investor, the application process is fairly straightforward. You’ll find the application form on the Australian Tax Office (ATO) website. It’s an online application, so you’ll fill in your details and submit it via the ATO website.

Along with the application form, you’ll have to pay an application fee.

The fee is entirely dependent on the cost of the new property or vacant land you want to buy and changes each year. You will need to keep an eye on the FIRB’s website.

You’ll typically find out within 30 days whether your application has been approved or declined.

FIRB Approval Exemptions When Buying a House

FIRB applications are generally only required for non-residents or temporary residents looking to purchase property in Australia. So, the following groups of people are exempt from applying for approval with the FIRB:

• Australian citizens (regardless of whether they live in Australia or not)
• New Zealand citizens
• Australian permanent visa holders
• Foreigners buying property as joint tenants and are married to someone who belongs to one of the above groups.

Get Expert Tax Advice Before You Buy

While this article provided guidance as to the process of applying to the FIRB, there is a lot to consider before buying a house in Australia as a foreigner. For example, you’ll have to pay taxes such as stamp duty on your new property. And if you’re buying an investment property, you’ll likely have to pay income tax on the rental income that you generate.

You also have to consider that you may have to pay capital gains tax if you decide to eventually sell the property.

You’ll need to engage the services of a Qualified accountant / tax agent to help you navigate the complex world of Australian tax.

Key Takeaways 

The Australian Government has strict rules about who can purchase what type of property, so be sure that you are compliant with these rules and regulations before you get started.

Foreign investors can purchase residential property in Australia, but only subject to the Foreign Investment Review Board’s approval, and you’re limited to new buildings and vacant land.

If you’re considering financing your purchase, we can help you explore your lending options and find a loan structure that suits your unique circumstances as a non-resident buyer. Reach out to us for guidance tailored to your property journey in Australia.

 

Disclaimer: This blog offers general information on mortgages and finance for informational purposes only. It is not a substitute for personalized advice from a qualified mortgage professional or financial advisor. Use your discretion and seek professional guidance based on your individual circumstances.