Australia’s Two-Year Ban on Foreign Property Purchases: What You Need to Know

In a significant move to address housing affordability and availability, the Australian government has announced a two-year ban on foreign persons purchasing established residential properties. This restriction, set to take effect from April 1, 2025, will last until March 31, 2027. This policy aims to prioritize housing access for Australian citizens and permanent residents amid growing concerns over supply and affordability.

Upcoming changes in Australia’s real estate policies will impact foreign buyers in 2025. Here’s what you need to know.

Who Is Affected?

The ban applies to all foreign persons as defined by the Foreign Investment Review Board (FIRB), including:

• Non-residents living overseas – Individuals who do not reside in Australia.

• Temporary visa holders – Those on visas valid for more than 12 months, such as:

  • Subclass 482 (Temporary Skill Shortage)

  • Subclass 491 (Skilled Work Regional)

  • Subclass 485 (Temporary Graduate)

• Foreign-owned companies or trusts – Entities registered outside Australia or controlled by foreign interests.

Exceptions to the Ban

Certain foreign investments may still be allowed under specific conditions, including:

• New housing developments – Foreign buyers can continue purchasing brand-new homes or off-the-plan apartments.

• Vacant land purchases – Foreign investors may acquire land for new residential developments, provided they complete construction within a stipulated timeframe.

• Pacific Australia Labour Mobility (PALM) scheme – Investments supporting this program are exempted.

• Foreign spouses of Australian citizens or permanent residents – Some cases may qualify for exemptions, subject to FIRB approval.

• Investments that increase housing supply – Projects that contribute to new housing stock may be permitted.

Compliance and Enforcement

The Australian Taxation Office (ATO) and Treasury will oversee compliance through stricter measures, including:

• More rigorous screening of foreign investment applications.

• Additional funding of AU$ 5.7 million over four years to enhance compliance teams.

• Monitoring land banking practices to ensure properties are developed and not left vacant, with an AU$ 8.9 million allocation for audits.

Pathways to Permanent Residency and Property Ownership

Foreign buyers who obtain permanent residency (PR) will no longer be subject to these restrictions. Popular PR pathways include:

• Subclass 186 (Employer Nomination Scheme)

• Subclass 189 (Skilled Independent Visa)

• Subclass 190 (Skilled Nominated Visa)

Next Steps for Foreign Buyers

For those affected by the ban, the following steps are advisable:

1. Act Before April 1, 2025 – If considering purchasing an established dwelling, lodge FIRB applications promptly.

2. Explore Alternative Investment Options – Focus on new developments or land purchases.

3. Seek Professional Advice – Consult legal and migration experts to navigate exemptions or PR pathways.

4. Stay Updated – Regularly check official sources such as the ATO and FIRB websites for policy updates.

This policy underscores Australia’s efforts to balance foreign investment with domestic housing needs. Foreign investors and temporary residents should adjust their strategies accordingly to remain compliant while exploring alternative opportunities in the Australian property market.