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Rules & Regulations Of Foreigners Buying Property In Australia

What are the laws for foreign investment in Australian property? If you’re not an Australian resident, you may be a little unclear on what you can and can’t buy. Canstar investigates.

The rules on foreign property investment in Australia are based on how much money you’re planning to invest, whether you’re a part-time resident or not, and what type of real estate you’re planning on buying. This is obviously a tricky field to navigate, so we put together a handy little guide to foreign property investment in Australia. Please note, we have concentrated on residential property only, and not farming land.

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Property investment by temporary residents

When it comes to buying Australian property, temporary residents can buy a single established dwelling for their own accommodation, but beyond that any residential property they buy must add to the housing stock. This means brand new or building; they may not buy established dwellings for investment purposes. So in short, they:

temporary resident investment
  • Can buy one established dwelling only to live in
  • Can also buy new dwellings or vacant land with a view to build new dwellings, as per Government policy encouraging the building of more housing
  • Cannot buy established dwellings as investment properties

Applications by temporary residents to buy new dwellings are generally approved without conditions, whereas applications by temporary residents to buy vacant land for development purposes are generally approved subject to a few conditions, typically concerning a timeframe in which construction must begin.

Property investment by non-residents

Because of the fact that they don’t reside in Australia at all, foreign residents are only allowed to enter the Australian property market if their entry adds to the property market. This means that they’re only allowed to invest in new dwellings, off-the-plan properties under construction, or vacant land with a view to development.

Because they’re not residents, they’re not allowed to buy established dwellings unless they plan to demolish said dwelling and construct a new one within 4 years of the date of approval. The redevelopment must add to the housing stock for approval to be given.

non-resident property investment
  • Cannot buy established dwellings, unless the purchase is for redevelopment purposes and will genuinely increase the housing stock
  • Can buy new dwellings, off-the-plan properties under construction/yet to be built, and vacant land for development purposes

Applications by foreign persons to buy new dwellings are usually approved without conditions, whereas applications by foreign people to buy vacant land for development purposes are generally approved subject to a few conditions, typically concerning a timeframe in which construction must begin.

Case study

Jon is a foreign non-resident and wants to purchase a recently built dwelling.

temporary resident investment

The owner of the property had demolished an existing dwelling on the property and built a single dwelling in its place. The owner has not occupied the dwelling and the property has not been sold since the dwelling was rebuilt.

In this case, the dwelling does not represent a genuine increase in Australia’s housing supply. To ensure the sale of the property is consistent with the national interest, the dwelling will not be treated as a new dwelling, under Australia’s foreign investment framework. Jon, as a foreign non-resident, would generally not receive approval to purchase the property.

Source: Foreign Investment Review Board (FIRB)

More details and information concerning the rules and regulations on foreign investment in Australian real estate can be found here, at the Foreign Investment Review Board’s website.

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