What is changing

In the 2026-27 Budget, the Government announced it will extend the temporary ban on foreign purchases of established residential dwellings by a further two years and three months, until 30 June 2029. The ban was originally implemented from 1 April 2025. Until that date, foreign persons, including temporary residents and foreign-owned companies, cannot buy an established dwelling in Australia unless a limited exception applies.

Why the change

The ban forms part of the Government’s broader housing affordability agenda, which is aimed at prioritising domestic buyers in the established property market and reducing upward pressure on housing prices. The two-year extension announced in the 2026-27 Budget and the Government’s investment in strengthening ATO enforcement capacity signifies that this is not a temporary or transitional measure; instead, this reflects a sustained policy direction that foreign investors should plan around rather than wait out.

How it works

Who is impacted

A person is considered a “foreign person” under Australian foreign investment legislation if they are a non-citizen, a non-permanent resident, a temporary visa holder permitted to stay in Australia for a continuous period of 12 months or more, a foreign corporation, or the trustee of a foreign trust. This means the ban applies not only to offshore investors but also to international students, skilled visa holders, and foreign-owned corporate structures operating in Australia.

What can and cannot be bought

An established dwelling, meaning any existing dwelling on residential land, cannot be purchased by a foreign person during the ban period. The types of residential property a foreign person can buy in Australia include:

• a new or near-new dwelling
• an established dwelling for redevelopment
• an off-the-plan property
• vacant residential land
• an established dwelling for a foreign company that employs workers from Pacific island countries and Timor-Leste and are required to provide housing for them, including those participating in the Pacific Australia Labour MobilityExternal Link (PALM) scheme.

Vacant land is land with no substantive permanent building on it that can be lawfully occupied, and which has not previously had an established dwelling on it. For vacant land acquisitions, construction must commence and be completed within four years of approval.

Where a foreign person seeks to acquire an established dwelling for redevelopment purposes, the exception is narrow. Approval is generally only granted where the development will significantly increase Australia’s housing stock, all construction is completed within four years of the approval date, and the developer does not sell or transfer their interest before construction is complete. In practice, this means a minimum of 20 additional dwellings must be constructed on the land.

The cost landscape

FIRB approval must be obtained prior to any contract being executed. Property developers applying for a new or near-new dwelling exemption certificate must pay an initial application fee of $65,200 for the 2025-26 financial year, with separate per-sale fees payable every six months thereafter. On top of FIRB fees, state-level foreign purchaser duty surcharges currently apply as follows:

• 9% in NSW
• 8% in Victoria
• 8% in Queensland

These surcharges are calculated on the dutiable value of the property and payable in addition to ordinary stamp duty. For a $1 million property in Sydney, this surcharge alone amounts to $90,000 before any other acquisition costs are counted.

What you should do now

Foreign investors with existing Australian property holdings should review their FIRB approval conditions and development timelines promptly to ensure compliance. A foreign person may have breached the foreign investment rules if they purchase an established dwelling after 1 April 2025 unless a limited exception applies.

Proxy or nominee arrangements, where an Australian citizen or permanent resident purchases property on behalf of a foreign person to circumvent FIRB restrictions, carry significant legal risk and may constitute an offence under applicable state duties legislation. Most Australian states and territories require a purchaser of land to declare whether they are acquiring for their own benefit or on trust for another, and whether any beneficiaries are foreign. Section 104T of the Duties Act 1997 (NSW) expressly captures these apparent purchaser arrangements for surcharge purchaser duty purposes.

Those considering new acquisitions should obtain legal and FIRB advice before entering any contract.