Property in Australia: FIRB approval and the ban on existing homes

Australia is a rare developed market where a foreigner cannot simply arrive and buy. A permission regime applies: a transaction requires approval from the federal foreign investment regulator, and the type of property you are allowed to acquire at all is defined in advance. This is not a bureaucratic formality — buying without approval leads to a forced sale of the property and a fine.

Approval comes before the purchase, not after

• The application is submitted before the contract, or the contract is made conditional on approval.
• Consideration is chargeable, and the fee is calculated on the value of the property: for expensive housing that is a material sum, and it is not refunded if the transaction is abandoned.
• Approval is granted for a specific property, not as "a right to buy in Australia". Its validity is limited — usually around a year — and the transaction has to complete within it.
• Breaching the regime leads to an order to sell and a monetary penalty; the regulator publishes such cases.

What a foreigner is allowed to buy

The base rule of Australian policy: foreign money should add to the housing stock, not redistribute the existing one. Hence the logic of the restrictions.

• New housing and off-plan purchase — the main permitted route, because such a transaction funds construction.
• Vacant development land — as a rule with an obligation to build within a set period.
• Existing housing on the secondary market — closed. From 1 April 2025 a direct ban applies to foreign buyers acquiring already-built homes, introduced for a two-year term with narrow exceptions.

Temporary residents could previously buy one existing home for their own occupation with an obligation to sell on departure; the current ban has narrowed that.

An annual vacancy fee

Having bought, a foreign owner must report annually on the property's use. If it was neither occupied nor let for more than a set number of days in the year, a vacancy fee is charged — and for properties acquired in recent years its size was substantially increased. The logic is the same: housing should be used, not stand as a safe.

State surcharges — a second layer of cost

Beyond the federal regime, each state levies its own surcharges on a foreign buyer, and they are not small.

• A foreign purchaser surcharge on stamp duty — additional percentage points on top of the ordinary duty, at a rate set by each state.
• A land tax surcharge — annual, for foreign and absentee owners.

It adds up. A federal application fee, a state surcharge at purchase, an annual land tax surcharge and a vacancy fee together change the economics of the purchase — and they have to be in the model before the contract, not after it.