On 16 February 2025 the Australian Government announced a two-year ban on foreign persons purchasing established residential dwellings, running from 1 April 2025 to 31 March 2027. The ban operates through the existing Foreign Acquisitions and Takeovers Act 1975 framework: foreign persons cannot obtain FIRB approval to acquire an established dwelling during that window, with narrow exceptions for build-to-rent investment, redevelopment that materially adds housing supply, and certain Pacific Australia Labour Mobility scheme arrangements. Conveyancers on both sides of any sale should verify the purchaser's status, ensure correct contract warranties, and confirm any state foreign-purchaser surcharge is assessed properly. Get this wrong and the transaction is exposed to civil penalties and a divestiture order under the Act.
What the ban is and when it operates
The foreign investment framework for residential property is set out in the Foreign Acquisitions and Takeovers Act 1975 (FATA), administered by the Treasurer with advice from the Foreign Investment Review Board (FIRB). Foreign persons must generally obtain FIRB approval before acquiring an interest in Australian residential land.
On 16 February 2025 the Treasurer (Hon Jim Chalmers) and Housing Minister (Hon Clare O'Neil) jointly announced a two-year ban on foreign-person purchases of established residential dwellings. The ban operates from 1 April 2025 to 31 March 2027. During that window, FIRB will not approve new applications from foreign persons to purchase an established dwelling, other than for the narrow categories of investment that materially add to housing supply.
The measure was framed as part of the government's housing affordability response. It complements (but does not replace) the long-standing pre-existing settings under which foreign persons could acquire established dwellings only with FIRB approval and only in specific circumstances (e.g. for redevelopment that increased housing stock).
For the live policy text, see the Treasury page on foreign investment policy and the FIRB page on residential real estate.
---
Who counts as a "foreign person"
Section 4 of FATA defines "foreign person". The category covers a wider range of buyers than many clients assume:
- Individuals not ordinarily resident in Australia. Australian citizens are not foreign persons. Permanent residents who are ordinarily resident in Australia are not foreign persons. Temporary visa holders (including 482, 485, 500/student, 491 and similar) are foreign persons for FATA purposes, irrespective of whether they live and work in Australia. - Foreign corporations. Broadly, corporations where one foreign person holds 20% or more of the entity, or two or more foreign persons together hold 40% or more. - Foreign government investors. Foreign government-controlled entities have their own (more stringent) screening regime. - Trusts. A trust is a foreign person where foreign persons together hold a 20% or 40% interest under the same aggregation rules.
The "ordinarily resident" test for individuals requires actual physical presence in Australia for at least 200 days in the preceding 12 months and a continuing right to remain indefinitely. A temporary visa holder generally does not meet this test, regardless of how long they have lived in Australia.
---
What the ban does and does not cover
Covered (ban applies):
- Existing free-standing houses, townhouses, units and apartments. - Any residential dwelling that has previously been occupied (whether by an owner-occupier or a tenant). - Acquisitions through a foreign-controlled entity or trust structure with the same effect.
Not covered (ban does not apply, but FIRB approval may still be required):
- New dwellings. First-sale apartments, new house-and-land contracts, off-the-plan sales (where the foreign person is the first purchaser from the developer). Treasury has confirmed these continue to be approvable. - Vacant residential land where the development conditions require the foreign purchaser to complete construction within four years and lodge evidence of completion. - Redevelopment arrangements where the foreign person is acquiring an established dwelling for demolition and replacement with multiple new dwellings that increase the housing stock. - Build-to-rent projects acquired by foreign institutional investors under the discrete BTR framework. - Pacific Australia Labour Mobility (PALM) scheme housing acquired by approved PALM employers to house Pacific workers (narrow exception confirmed in the announcement). - Diplomatic and consular premises as separately approved.
Where an exception is being relied on, the foreign person still typically requires FIRB approval — the application is just made under a category that the ban does not preclude. The conveyancer's role is to confirm the right pathway is being used and to make sure contract conditions allow time for the approval.
---
Contract warranties and conveyancing checks
Standard state contract forms typically include vendor warranties and purchaser warranties. For 2025–2027 transactions, conveyancers should specifically verify and (where relevant) tighten the following:
Purchaser-side warranty. An express purchaser warranty that the purchaser is not a foreign person within the meaning of FATA, or if it is, that it has obtained the required FIRB approval and the acquisition is permitted under the program rules in force. If the purchaser is a foreign person relying on an exception, the warranty should identify the exception.
Vendor-side disclosure. Vendors should not be exposed to FATA penalties — those penalties target the purchaser. But the vendor's conveyancer should still be alert to red flags (overseas-only postal addresses, foreign-source funding clearly not run through an Australian bank, signing via agent abroad) and ensure the contract makes the FIRB position the purchaser's responsibility.
Subject-to-FIRB clause. Where the purchaser is a foreign person and approval is still pending, the contract should be conditional on FIRB approval within a defined period. FIRB residential application timing varies; current expected processing times are published on the FIRB page. Build in adequate time.
Foreign purchaser surcharge duty. Most states apply an additional transfer duty surcharge on foreign purchasers of residential property — separate from FIRB, and assessed by the state revenue office at settlement. Current surcharge rates published by each SRO are: - NSW: 9% (Surcharge Purchaser Duty) under the Duties Act 1997 (NSW), confirmed on the Revenue NSW site. - VIC: 8% under the Duties Act 2000 (Vic). - QLD: 8% under the Duties Act 2001 (Qld). - WA, SA, TAS, ACT, NT: lower rates apply or no surcharge applies; check the SRO page. Verify with the relevant state revenue office before settlement. Recent treaty-based litigation has produced refunds for purchasers from some treaty-partner countries in some states; advise the client to take their own tax advice on whether a treaty-based refund claim is available.
ATO Register of Foreign Ownership. Since 1 July 2023, foreign persons acquiring registrable interests in Australian residential land must register with the ATO Register of Foreign Ownership of Australian Assets within 30 days of the acquisition. Confirm the purchaser is aware of and intends to comply with this obligation.
---
Penalties and consequences for breach
The penalties for breach of FATA are significant. The 2020 reforms (Foreign Investment Reform (Protecting Australia's National Security) Act 2020) substantially increased the available penalties, and the 2024–2025 amendments continued that direction:
- Civil penalties apply for unapproved acquisitions of residential land — see the penalty framework in the Foreign Acquisitions and Takeovers Act 1975 and the FIRB guidance on compliance and enforcement for current penalty units and thresholds. - Criminal penalties apply for deliberate contravention or false declarations. - Divestiture orders can be made by the Treasurer requiring the foreign person to dispose of the property within a specified timeframe. - The ATO has a dedicated compliance and enforcement program targeting unapproved residential acquisitions, regularly publicises enforcement outcomes, and operates a tip-off line.
For conveyancers, the practical consequence is that any uncertainty about a purchaser's foreign-person status must be resolved before exchange — not after. A contract that proceeds against the ban exposes the purchaser to penalties and divestiture, and the conveyancer to professional indemnity exposure.
---
What to do for each transaction type
Australian citizen purchaser. Standard contract. Confirm passport or citizenship documentation. No FIRB or surcharge issues.
Permanent resident purchaser ordinarily resident in Australia. Confirm permanent residency by sighting the visa label or VEVO check, and confirm 200-day physical presence in the preceding 12 months for the "ordinarily resident" test. If satisfied, treat as non-foreign for FATA. State surcharge duty is generally not payable on permanent residents who are ordinarily resident.
Temporary visa holder purchaser of an established dwelling. Sale is generally precluded by the ban during the 1 April 2025 – 31 March 2027 window. Advise the client and decline to act unless an exception applies and FIRB approval is in hand.
Temporary visa holder purchaser of a new dwelling, off-the-plan or vacant land for development. FIRB application required; ban does not apply. Subject-to-FIRB clause in contract. State surcharge duty applies.
Foreign company or foreign-controlled trust purchaser. FIRB application required regardless of dwelling type. Ban applies for established dwellings; exception categories apply for new dwellings, redevelopment and BTR. State surcharge duty applies.
For a wider read on related current housing measures, see our companion articles on Help to Buy shared-equity, First Home Guarantee 5% deposit, and federal vs state housing measures 2025-26. To find a conveyancer experienced with FIRB and foreign-purchaser transactions, browse conveyancers in Sydney and Melbourne.
---
FAQ
Q: My client is a 482 visa holder who has lived in Australia for five years. Can they buy an established home? A: Generally no during the ban window. Temporary visa holders are "foreign persons" under FATA, and the ban prevents FIRB approval for foreign persons acquiring established dwellings between 1 April 2025 and 31 March 2027. They can still buy new dwellings or off-the-plan with FIRB approval. Once they obtain permanent residency and meet the ordinarily-resident test, they are no longer foreign for FATA. Q: My client is a New Zealand citizen. Are they foreign? A: New Zealand citizens holding Special Category Visas (subclass 444) are still temporary visa holders for FATA purposes and are foreign persons unless ordinarily resident in Australia. The "ordinarily resident" test (200-day physical presence and a continuing right to remain indefinitely) often does not capture SCV holders. Confirm visa status and physical presence carefully. Q: A foreign-controlled trust is buying off-the-plan. Does the ban apply? A: No — the ban targets established dwellings. Off-the-plan is a new dwelling acquisition for FATA purposes. FIRB approval is still required, and the application fee is calculated on the contract price. State foreign-purchaser surcharge duty also applies. Q: A foreign-person purchaser is buying with the intention of demolishing and redeveloping. Does the ban apply? A: The redevelopment-and-supply-increase pathway is one of the narrow exceptions to the ban. FIRB approval is required and is granted on conditions that include demolition and the construction of a defined number of additional dwellings within a specified timeframe. Conditions are enforced — non-compliance can trigger divestiture and penalties. Q: We exchanged a contract before 1 April 2025 but settle after 31 March 2027. Is the contract caught? A: The ban applies to applications to acquire, not solely to settlement. A contract validly entered into under an existing FIRB approval before the ban came into effect is generally not retrospectively affected. Confirm the approval terms and conditions remain valid at settlement.---
Sources
- Foreign Investment Review Board — Residential real estate: firb.gov.au — residential real estate - Australian Government Treasury — Foreign investment policy: treasury.gov.au — foreign investment - Joint media release by Treasurer and Housing Minister, 16 February 2025 — Foreign investment in housing (search Treasury ministers' media releases): ministers.treasury.gov.au - Foreign Acquisitions and Takeovers Act 1975 (Cth): legislation.gov.au — FATA 1975 - ATO — Register of Foreign Ownership of Australian Assets: ato.gov.au — Register of Foreign Ownership - Revenue NSW — Surcharge purchaser duty: revenue.nsw.gov.au — surcharge purchaser duty - State Revenue Office Victoria — Foreign purchaser additional duty: sro.vic.gov.au — foreign purchaser - Queensland Revenue Office — Additional foreign acquirer duty: qro.qld.gov.au — AFAD - State law societies / find a conveyancer: lawcouncil.org.au
Information in this article is general and current as at 19 May 2026. FIRB exemption settings and state surcharge rates change; verify against the linked sources before advising a client.
Browse our independent directory of conveyancers at /best/.