Can foreigners buy property in Australia? Yes, here’s how

Are you looking to join the long list of foreign buyers searching for a slice of the Australian dream? You might be wondering, are you even allowed to buy property in Australia as a foreign buyer? 

Typically you need to be a permanent resident or citizen to buy property in Australia and if you need to fund it with a home loan, many of the available home loans also require you to meet the same criteria. But foreigners can still buy. However, the property has to be a new dwelling, vacant land, or off-the-plan property and you need government approval to get it.

Let’s take a closer look.

Firstly, as a foreigner, you’ll need to submit an application to the Foreign Investment Review Board (FIRB), which assesses non-Australian citizens who want to buy or invest in Australian property.

If you get approved for an investment property, there are a couple of things to keep in mind:

• It must be a new property or vacant land to build a new property.
• The investment property cannot be an established dwelling.

If you do buy an established dwelling, you’re required to live in it and then sell it once you no longer live there. 

The FIRB charges an application fee, an amount that depends on the value of the property you plan on buying. So this figure can vary a bit depending on the value of the property. You need to double check this before purchasing - the FIRB has some guidance on it.

The current fees from 1 July 2023 to 30 June 2024 are:

*Source: Australian Taxation Office website

There is also the Foreign Citizen Stamp Duty you’ll have to pay on top of all the usual house-buying fees. This particular stamp duty is an 8% surcharge in NSW, for example, that goes on top of theusual stamp duty (also called transfer duty) that all property buyers are required to pay when they purchase a property. Apart from the Northern Territory, each state and territory will charge additional stamp duty for foreigners. 

Aside from those extra bits, the process of buying a home and applying for a home loan is pretty much the same as if you were a local.

There are serious consequences if you are found in breach of FIRB rules. If you’re a non-resident or temporary resident who purchases a property without FIRB approval, you could face fines depending on the number of penalty units that your breach constitutes. You could also face prison time, depending on your breach action.

If you’re found in breach of FIRB rules, how much would you end up paying? Every penalty unit is worth $222 and each breach action constitutes a differing number of penalty units. For instance, you may receive 100 penalty units, meaning that you need to pay $22,200.

If you are on a temporary visa, such as a partnership visa, 457 work visa, temporary skills shortage visa or student visa, you’ll still need approval from the FIRB to purchase property in Australia. This is because you are still classified as a foreigner when it comes to buying property and must follow the same criteria as above.

There are a few instances where you’ll find exemptions from FIRB approval. If you’re an Australian citizen, you can still purchase property if you live outside of the country. Permanent residents are also exempt from FIRB approval.

If you’re a New Zealand citizen, you won’t have to worry about all the extra rules other foreigners have to deal with as Kiwi nationals tend to be given the same rights as Aussie home buyers when buying Australian property. Although, if you’re purchasing property from outside of the country, you may need to pay foreign citizen stamp duty.

Also, if you’re purchasing a house as a joint tenant with a spouse who is an Australian or New Zealand citizen, you won’t have to look for FIRB approval. 

Yes, but it’s not that straightforward. Many Australian lenders have strict rules that you must be an Aussie or a permanent resident to qualify for a home loan. And those who do lend to foreigners tend to impose tighter lending criteria like:

• Paying a higher interest rate
• Needing a larger deposit (around 30-40%)
• Imposing restrictions on foreign income used to pay the loan
• Having to obtain approval from the FIRB.

Don’t let this deter you though! There are plenty of options out there such as internationally recognised banks that operate in Australia that offer home loans like HSBC and Citibank.

If you are looking to buy a new home in Australia check out our home loan guides.