Buying property in Australia as a foreign buyer: complete FIRB guide (2026)

Who is a “foreign person” under FIRB rules?

Australia’s Foreign Investment Review Board (FIRB) administers the Foreign Acquisitions and Takeovers Act 1975 (FATA). Under this legislation, a “foreign person” includes:

• Foreign nationals who are not Australian permanent residents or citizens, including people on temporary visas (student, working holiday, skilled temporary, partner visas, etc.)
• Foreign corporations. Companies incorporated outside Australia, or Australian companies where a foreign person holds 20%+, or foreign persons collectively hold 40%+
• Foreign trusts. Trusts where foreign persons hold a 40%+ interest
• The foreign government sector. Sovereign wealth funds and state-owned enterprises

Who is NOT a foreign person: Australian citizens, Australian permanent residents (PR), and New Zealand citizens who hold a Special Category Visa (subclass 444) are not foreign persons for FIRB purposes. These individuals can purchase any residential property without FIRB approval.

Note that NZ citizens on a 444 visa are treated as residents for FIRB purposes but may still be subject to foreign-purchaser duty surcharges in some states (state rules differ from the FIRB national framework).

What can foreign buyers purchase?

The type of property a foreign person can buy depends on their visa status:

Temporary residents (including temporary visa holders)

Temporary residents may purchase:

• One established (existing) dwelling, provided it will be used as their principal place of residence while they live in Australia. They must sell the property when they leave Australia permanently, FIRB will impose this condition.
• New dwellings (subject to FIRB approval).
• Vacant land for development (subject to FIRB approval and construction conditions).

Temporary residents cannotbuy established dwellings as investment properties or holiday homes. The “must live in it” and “must sell when leaving” conditions are firm.

Non-residents (living offshore)

Foreign non-residents face the most restrictions:

• They cannot buy established (existing) dwellings at all, with very limited exceptions.
• They can buy new dwellings, properties that have not been previously sold or occupied (off-the-plan apartments, newly built houses).
• They can buy vacant land for residential development, subject to conditions requiring construction to begin within 4 years.

The policy rationale is to encourage construction of new housing stock rather than foreign buyers competing with Australians for established homes.

Foreign developers

Foreign entities purchasing new dwellings for resale must obtain developer approval. Different thresholds and conditions apply. Seek specialist advice if buying through a foreign development company.

The FIRB application process

FIRB approval must generally be obtained before signing a contract. In practice, many buyers make the contract conditional on FIRB approval, meaning you can sign, but the contract is only binding once FIRB approves. Confirm the wording with your solicitor.

1. Determine if approval is required. Use FIRB’s online tool at firb.gov.au.
2. Lodge the application. Apply at firb.gov.au. You will need details of the proposed purchase, your visa status, and supporting documents.
3. Pay the application fee. The fee is based on the purchase price and is non-refundable even if approval is denied.
4. Wait for a decision. FIRB has 30 days to decide; the Treasurer can extend to 90 days.
5. Conditions on approval. Approval is typically granted with conditions, for example, temporary residents will have a condition requiring them to sell when they permanently leave Australia.

FIRB application fees (2025 to 2026)

FIRB fees are tiered by property value. Fees are indexed annually. The 2025 to 2026 fees for residential land are:

These fees are substantial and non-refundable. They are not a tax, they are an administrative fee for processing the application. Always include FIRB fees in your total acquisition cost budget.

State-by-state foreign buyer stamp duty surcharges

In addition to standard stamp duty, all Australian states (except ACT and NT) impose a foreign purchaser surcharge on top of the normal stamp duty. This is a significant additional cost that many foreign buyers underestimate.

Use our Stamp Duty Calculator to estimate your total duty including the foreign surcharge.

State revenue offices update rates and thresholds regularly. Always verify current rates before transacting.

Land tax surcharges for foreign owners

Most Australian states also impose an additional annual land tax surcharge on property owned by foreign persons. This is a recurring charge on top of standard land tax.

• NSW. 4% annual surcharge on the land value of residential properties owned by foreign persons
• VIC. 2% absentee owner surcharge (rising to 4% for those with interests in multiple properties)
• QLD. 2% surcharge land tax on all Queensland land owned by foreign persons
• SA. 0.5% surcharge on the taxable value
• WA. No specific foreign-owner land tax surcharge (but standard land tax applies)

Always check the current rates with the relevant state revenue office, as these surcharges have been increasing in recent years. For high-value properties, the annual land tax surcharge can amount to tens of thousands of dollars per year.

Tax implications for foreign property investors

Rental income, withholding tax

Non-resident foreign investors who earn rental income from Australian property are subject to Australian tax:

• Non-residents pay tax at 32.5% on the first $135,000 of Australian-sourced income (2025 to 2026 rates), with no tax-free threshold available to non-residents.
• Rental expenses (interest, management fees, rates, insurance, depreciation) are still deductible, reducing the taxable rental income.
• You must lodge an Australian tax return each year you earn Australian income.
• Withholding agents (property managers) may be required to withhold tax from rent in some circumstances.

Capital Gains Tax (CGT)

When a foreign person sells Australian residential property:

• Australian CGT applies to the capital gain.
• Foreign residents are not entitled to the main residence exemption for the period they are a foreign resident (since 2020 reforms). This is a significant tax, you cannot exempt the gain on your “home” if you were a foreign resident during the ownership period.
• The 50% CGT discount is generally available to foreign residents only for the period they were an Australian tax resident. For non-residents, no discount applies to gains accrued while a non-resident.
• Foreign Resident Capital Gains Withholding (FRCGW). For property sold above $750,000, the buyer must withhold 15% of the purchase price and remit it to the ATO unless the seller provides a clearance certificate.

FIRB notification on sale

If you bought under a FIRB approval with conditions, you may be required to notify FIRB when you sell. Check your approval conditions carefully.

Using a company or trust

Some foreign buyers consider purchasing through an Australian company or discretionary trust for asset protection or tax planning reasons. Key points:

• An Australian company or trust becomes a foreign person for FIRB purposes if it is controlled by foreign persons, typically if a foreign person holds 20%+ (company) or 40%+ (trust).
• Buying through a structure does not exempt you from FIRB approval requirements or foreign-purchaser surcharges, the surcharges apply to the entity making the purchase if it is a foreign person.
• A structure may have advantages for estate planning, liability limitation, or income splitting, but these benefits must be weighed against the additional compliance costs (company fees, annual returns, separate tax returns).
• Self Managed Superannuation Funds (SMSFs) have separate rules, non-residents generally cannot be trustees or members of an SMSF investing in Australian property.

Do not establish a corporate or trust structure without specific legal and tax advice.

Practical tips for foreign buyers

• Budget the full cost upfront. Add FIRB fees + foreign purchaser surcharge + standard stamp duty + conveyancing to your deposit. On a $1M property in NSW, this can easily total $130,000+.
• Engage a solicitor experienced in foreign investment before making any offers. A general-practice solicitor may not be familiar with FIRB conditions and their implications.
• Make contracts conditional on FIRB approval if you haven’t obtained it before signing. Get the wording approved by your solicitor.
• Allow at least 60 to 90 days from application to settlement when planning your purchase timeline.
• Maintain Australian tax compliance. Lodge an Australian tax return each year you have Australian income.
• Check your visa conditions. Some visa subclasses have additional restrictions on property ownership. Your migration agent can advise.
• New dwellings only (for non-residents). Focus your search on off-the-plan apartments and new builds.