The foreign buyers guide to buying a house in Australia
Temporary residents, foreign residents or short-term visa holders from any country need to apply to the Foreign Investment Review Board (FIRB), which advises the government on Australia’s foreign investment policy and offers certain guidelines on who can buy what.
Compared to other countries, Australia has a fairly regulated approach to foreign real estate investment with the policy aimed at trying to increase the supply of new housing.
While temporary residents can invest in new property, they can only buy one existing residential property and must use it as their primary residence.
Fees for foreign home buyers
You must also pay an application fee to buy a residential property. For properties valued under $1 million, the fee is $5,700; for those valued over $1 million, the fee is $11,500 with an extra $10,000 charged for each additional million dollars in property value.
If you either hold a temporary visa that permits you to remain in Australia for a continuous period of more than 12 months or you have applied for a permanent visa and hold a bridging visa you will be seen as a temporary resident.
Before buying a residential property, you’ll need to apply for and receive foreign investment approval from FIRB.
To receive foreign investment approval you must meet the criteria below:
- Temporary residents can buy no more than one established dwelling, which must be used as their principal place of residence. They cannot rent out any part of the property, they must sell it within three months of ceasing to use it as their principal place of residence, and they must ensure the property is vacant at settlement.
- They are also normally allowed to buy an established dwelling for redevelopment, provided the redevelopment genuinely increases the housing stock; the project is completed within four years of the date of approval, and the existing dwelling is not rented out prior to demolition and redevelopment.
- Temporary residents cannot buy established dwellings as investment properties.
- When it comes to new dwellings, temporary residents face few restrictions: so long as the FIRB approves each acquisition, they can buy as many as they like.
- To be classified as a new dwelling, however, a property must not have been previously sold as a dwelling, nor have been built to replace one or more demolished established dwellings, nor have been previously occupied. The exception to this rule is if the property was part of a development with 50 or more dwellings and was sold by the developer of that development. In these circumstances, the property is still considered new if it has been previously occupied, so long as it wasn’t occupied for more than 12 months.
- Temporary residents can also buy vacant land for residential dwelling development, subject to the development being completed within four years of the date of approval and evidence of the project’s completion being submitted within 30 days of being received.
Non-residents include individuals who hold visas that permit them to remain in Australia for only a limited period, as well as foreign governments, corporations and general partners of a limited partnership who meet the definition of a foreign person, and trustees of a trust that meets the definition of a foreign person.
Non-residents must also apply for and receive foreign investment approval from FIRB by meeting the criteria below:
- Foreign non-residents cannot buy established dwellings, but they can buy new dwellings without being subject to any conditions. There are no limits on the number of new dwellings they can buy, although the FIRB generally needs to give approval prior to each acquisition.
- However, foreign non-residents are normally allowed to buy an established dwelling for redevelopment, provided the redevelopment genuinely increases the housing stock, the project is completed within four years of the date of approval, and the existing dwelling is not rented out prior to demolition and redevelopment.
- Foreign non-residents can also buy vacant land for residential dwelling development, subject to the development being completed within four years of the date of approval and evidence of the project’s completion being submitted within 30 days of being received.