Ban on foreign purchases of established dwellings

The ban

From 1 April 2025 to 31 March 2027, foreign persons (including temporary residents and foreign-owned companies) cannot apply to buy an established dwelling in Australia unless an exception applies.  A review will be undertaken to determine if the ban should be extended beyond 31 March 2027.

Why?

The ban is said to respond to housing challenges facing Australians who will be able to buy homes that would otherwise have been bought by foreign investors whilst encouraging foreign persons to boost Australia’s housing supply.

Previous position

Until now, foreign investors have generally been barred from buying existing property except in limited circumstances.  The previous rules already limited classes of foreign buyers to, for example, temporary residents (or their spouses) acquiring an established homes to use as their place of residence whilst in Australia or buyers planning to redevelop a dwelling where the redevelopment would genuinely increase Australia’s housing stock.

Exceptions to ban

Limited exceptions to the ban include investments that significantly increase housing supply or support the availability of housing supply, and for the Pacific Australia Labour Mobility (PALM) scheme.  Other existing exceptions remain in place, such as for purchases by:

• permanent residents

• New Zealand citizens

• spouses of Australian citizens, permanent residents, or New Zealand citizens (when purchased as joint tenants).

Enforcement

The ATO’s foreign investment compliance team will enforce the ban and enhance screening of foreign investment proposals relating to residential property.  Tough enforcement action is said to be proposed for any non‑compliance.

Land banking

Alongside the temporary ban on foreign purchases of established dwellings, to ensure that vacant land is put to productive use within reasonable timeframes, foreign investors will be subject to development conditions when they acquire vacant land in Australia.