Ban on Foreign Purchases

by Katarina Weston | June 02, 2025| Latest News

The federal government announced earlier this year a ban for at least two years on foreign purchases of established dwellings. 

From 1 April 2025 to 31 March 2027, unless an exception applies, foreigners (including foreign owned companies and temporary residents) cannot buy an established dwelling in Australia.

Some of the exceptions include permanent residents, spouses of Australian citizens, New Zealand citizens, and investments that support the availability of housing supply or significantly increase housing supply.  There are penalties if you purchase a property in Australia without first obtaining approval or an exemption certificate.

Towards the end of the two year period, the measures will be reviewed with a consideration to them being extended.

Foreign persons who own residential property will also be required to pay an annual vacancy fee if their property is not residentially occupied for or genuinely available for rent for more than 183 days during the year.

A foreign person may apply for an exemption certificate under the legislation to fast track the process and obtain approval for a program of investments instead of a separate approval for each investment. This process is intended for foreign persons with high volumes of investments and the applications will be considered on a case-by-case basis.

Foreign investments will be screened using the national interest test or the national security test, depending on the type of investment.  Certain conditions can be imposed to ensure the guidelines are met and, to ensure compliance with the changes to foreign ownership, the ATO will strengthen its screening process for foreign investment proposals related to residential property.

What does this mean for your property transaction?

If you are a foreign person, care needs to be taken at the start of the purchase process to ensure that your exemption has been applied for and granted.  Proper legal advice will assist you to consider other options if you don’t qualify for an exemption.  Failure to give consideration to these issues at the start may cause delays in your transaction, additional fees and a compromised deal if certain timeframes are not met.

Thinking about buying for foreign persons?  The short answer is, don’t!

Holding or acquiring a property on behalf of foreign family members or friends through complex structures such as trusts may seem like a good option to bypass the current restrictions on foreign ownership, but most states and territories require purchasers to make declarations about whether they are acquiring the land on trust for other people   Providing a false declaration may incur penalties. 

The foreign ownership rules are complex and our Property Team has decades of experience in property transactions.