The Federal Government has introduced a temporary ban on foreign persons, including temporary residents and foreign-owned companies, from purchasing established dwellings in Australia. This ban, which started on 1 April 2025, will be in effect until 31 March 2027. The primary goal of the ban is to alleviate pressure on Australia's housing market, increase the availability of existing homes for local buyers by limiting foreign investment and channel foreign investment into new dwellings.

Scope of the Ban

The new policy prohibits foreign persons from purchasing established dwellings, being residential properties that have been previously occupied or sold, in Australia.

Exceptions to the Ban

There are some exceptions to the ban, which include:

• Build to Rent projects: Foreign persons are allowed to purchase existing build-to-rent developments as long as the project satisfies the build-to-rent criteria
• Projects Increasing Housing Supply: Foreign persons can purchase and redevelop an existing property if the redevelopment results in at least 20 additional dwellings
• Commercial Scale Housing: Foreign persons can acquire established dwellings if the acquisition supports housing availability on a commercial scale. This includes interests in student accommodation, retirement villages and assisted living or aged care facilities
• Employee Living Quarters: Foreign-controlled companies that employ workers from Pacific Island countries and Timor-Leste, and are required to provide housing for them, including those participating in the Pacific Australia Labour Mobility scheme, are exempt from the ban.

Changes Introduced

• Temporary Residents: Under the new ban, temporary residents can no longer apply for approval to purchase an established dwelling, even if it is their principal place of residence
• Projects Increasing Housing Supply: The exception for projects increasing housing supply now requires the creation of at least 20 new dwellings, up from the previous requirement of just one
• ATO Audits: The Australian Taxation Office (ATO) intends to enforce the ban through enhanced screening of foreign investment proposals relating to residential properties and will carry out a full audit of current foreign investment approvals for vacant residential land development.

What’s unchanged

• Foreign Persons require approval: The requirement for foreign persons to obtain foreign investment approval before acquiring an interest in residential land, regardless of the value of the land, remains
• Conditions on approval: Approval for an acquisition of vacant land for residential development will generally be conditional on the construction being completed within four years and the land not being sold until the construction is complete
• Property developer approval: Property developers looking to sell new dwellings “off the plan” or newly developed dwellings to foreign persons can apply for foreign investment approval on behalf of their foreign customers. If a developer holds such an approval (New (or Near-New) Dwelling Exemption Certificate), the foreign person will generally not need to seek their own foreign investment approval
• Annual Vacancy fee: Foreign persons who own residential property will be required to pay an annual vacancy fee if their property is not residentially occupied or genuinely available for rent for more than 183 days (approximately six months) during a year
• Record keeping: Foreign persons must keep records relating to certain actions concerning their foreign investment for up to five years
• Integrated Tourism Resorts: Foreign persons seeking to purchase vacant residential land, a new dwelling, or an established residential dwelling, within a resort that was designated as an Integrated Tourism Resort (ITR) prior to September 1999 are exempt from the need to apply and receive foreign investment approval. For resorts designated as ITRs on or after September 1999, foreign persons are exempt from the need to receive foreign investment approval for purchases of developed residential property in the resort:
  • That is subject to a lease of 10 years or more to the resort operator
  • That is available as tourist accommodation when it is not occupied by the owner and
  • If the acquisition is consistent with any conditions imposed on the ITR at that time.

Further Reading

For more detailed information, you can refer to the following resources:

• The Treasury’s updated Residential Land guidance note released on 14 March 2025
• The ATO Guidance Note 6