If you’re dealing with foreign buyers in Queensland property, you cannot afford to misunderstand AFAD and FIRB. These are two separate legal regimes - one state, one federal - and together they can add tens of thousands of dollars to a transaction or stop it altogether.

Whether you’re a buyer, seller, or real estate agent in Brisbane, the Gold Coast or anywhere in Queensland, here’s what you need to know BEFORE a contract is signed!

Prefer to watch/listen? Click here to consume this content via YouTube!

Hi everybody - George Sourris, Empire Legal.

Today's topic: AFAD and FIRB explained: what foreign buyers pay in Queensland

The latest AFAD and FIRB explained - what foreign buyers pay in Queensland. This blog explains the difference between AFAD, Additional Foreign Acquirer Duty, and FIRB, Foreign Investment Review Board, and a few tips, tricks, and examples of how to tackle both of these tricky topics for Queensland real estate agents.

You'll walk away from this blog with the tools you need to have a baseline understanding to navigate AFAD and FIRB questions. If you've heard agents and clients talking about AFAD and FIRB, and thought it was too hard to unpack, you're not alone. These topics confuse a lot of people, but what they really come down to are two separate legal obligations that foreign buyers need to understand before purchasing residential property in Queensland.

What is AFAD?

AFAD stands for Additional Foreign Acquirer Duty, a Queensland State tax that applies in addition to the usual transfer (stamp) duty, when a foreign person buys residential land here. This additional tax is designed to ensure foreign acquirers of residential property who benefit from government services and infrastructure also contribute - the same as local buyers who have been paying local taxes for years.

AFAD is charged at an extra 8% on top of the standard transfer duty for residential land, when a foreign person is the acquirer. It is not optional - if a buyer is foreign and the land is residential, AFAD generally applies.

Who is a "foreign person" for AFAD?

A "foreign person" includes: a foreign individual - not an Australian citizen or permanent resident, a foreign corporation, and the trustee of a foreign trust.

You are a foreign individual if you are NOT an Australian citizen or permanent resident. That's the test guys. Very easy to remember. This means every purchaser that does not have Australian citizenship or is not an Australian permanent resident will be subject to this additional tax for their share of the property purchase.

A foreign corporation is one that is incorporated outside Australia, or in which foreign persons or related persons of foreign persons, have controlling interest of at least 50%. The same applies with foreign trusts. Please note there may be exemptions that apply, for example, the holders of retirement visas or purchases of lots in a hotel, so it's always best not to give any specific advice here.

Instead, just being able to identify if the purchaser may need to explore AFAD or FIRB and would need to obtain independent legal advice. There are of course nuances. For example, New Zealand citizens on a Special Category Visa, subclass 444, are treated as residents for AFAD purposes if they meet certain criteria.

Example - on a $1 million residential purchase, a foreign buyer could pay an additional $80,000 in AFAD on top of the usual transfer duty.

FIRB.

FIRB stands for Foreign Investment Review Board, the federal government body that regulates foreign investment in residential properties across Australia. A foreign person generally must apply to FIRB and obtain approval BEFORE buying residential property in Australia.

If approval is not obtained before contract signing, the purchaser could face penalties, including forced divestment of the property. FIRB fees are set by the federal government and increase with property value. For example, up to $1 million purchase price - $45,300 application fee. Up to $2 million - $90,900. Up to $3 million - $181,800, et cetera. FIRB fees are adjusted annually and should be checked at the time of application. It's all available on the government's website. This process is usually completed by the purchaser themselves, direct on the government's website.

If they require help, we suggest engaging immigration lawyers who specialise in this area. If you need a contact, we can put you in touch with someone that can help. If you're an Australian citizen or permanent resident, or a New Zealand citizen, you do not need to apply for FIRB approval.

Fees are generally payable at the time the application is lodged. For most applications, the statutory timeframe of 30 days for making a decision on an application or notification will not start until the correct fee has been paid in full. 

Just to clarify guys, so when you're doing your FIRB application, it's not for a specific property, it's for a certain criteria. So say you're in that up to $2 million range. If you get approved, usually you have up to 12 months to find the property that meets that criteria. So you don't have to apply every time you are looking at a property. Obviously it's for that timeframe, and I believe extensions can be requested, but again, that's probably a better question for the relevant lawyer that's looking after you with the application. 

There is an annual vacancy fee for foreign owners of residential dwellings as well. If the dwelling is not residentially occupied or rented for at least 183 days, approximately six months, in a year.

The 2025-2027 established dwelling ban.

Important recent change - so on the 1st of April 2025 until the 31st of March 2027, the Australian government has banned foreign persons from purchasing established dwellings, i.e. existing homes, and unless an exemption applies.

This is a separate rule to FIRB and AFAD. It means that even with FIRB approval, a foreign person usually cannot buy an established home unless it falls under an exception, such as certain redevelopment situations. How AFAD and FIRB work together. So AFAD is enforced by the Queensland Revenue Office, and it means an extra 8% duty for foreign buyers. Next, FIRB is a Commonwealth government enforcement - where approval is required prior to purchase.

And the established dwelling ban - that's a Commonwealth government enforcement. So foreign persons can't generally buy existing homes between those dates in 2025 - 2027. Both AFAD and FIRB can apply at the same time in the same transaction, and the foreign buyer must satisfy both when applicable.

A couple of quick examples to put this all together.

An example of some exceptions from the requirement for FIRB are: if a foreign person is purchasing a property with an Australian citizen or permanent resident, or a New Zealand citizen, as joint tenants, and are in spousal relationship, then they are exempt from needing FIRB approval.

This exemption does not apply between friends or other family members. They must also reside in the property as their principal place of residence. To be eligible for this, they must be married or in a defacto relationship. An example of a defacto relationship is they've lived together for two years or longer. Note, this is not an exhaustive definition.

Another exemption available is for new or near new properties where the property developer holds an FIRB exemption certificate for the new property that the foreigner would like to purchase.

Overall, the cost of obtaining FIRB approval can be a significant expense for foreign buyers looking to invest in residential property in Queensland, and without it, they're legally unable to purchase the property. It's important for a buyer to factor in these costs into their budget and also ensure the contract is subject to the approval being obtained and allows sufficient time for the approval.

Two quick hypothetical situations:

Number one.

Sergio is a foreign person looking to buy a $1 million residential property in Queensland. He's found a place at Indooroopilly. He will be required to pay the standard transfer duty on the property. If he's moving in as his principal place of residence, the fee would be $30,850. As well as the AFAD fee, 8% of the purchase price, which is an additional $80,000.

Furthermore, he will require FIRB approval, which will take approximately 30 days and attract an application fee of $45,300. Keep in mind, that's just for the application fee. There's no guarantee of success. Remember, you need to apply before you buy.

Number two.

Sally is married to Fernando, Sally is Australian. However, Fernando is not an Australian citizen or permanent resident. They're looking to buy a property together for $1 million to move into as long as they buy as joint tenants and have the property as their principal place of residence, Fernando will not require FIRB approval.

Fernando will however, need to pay AFAD (8% of the purchase price) on his 50% share of the $1 million, which is an extra $40,000 in addition to the normal transfer duty of $30,850.

Nearly there. Guys, this is a long one, but it's a lot of information to cram in. Let's keep going....

What questions do I need to ask?

The whole purpose of this blog is to protect both you as the real estate agent and the agency from any risk of claim, and being able to flag possible issues early that may prevent the transaction from actually settling.

To help achieve a smooth transaction, the red flags you need to know that should prompt you to advise a buyer to seek advice from their lawyer for FIRB and AFAD are very simple - just ask them if they are an Australian citizen or permanent resident. If the answer is no, they need to speak to someone who can counsel them for their specific situation and advice.

This can also affect the lender, so they will need to make sure their banker or broker knows they are foreign as well. This base knowledge can prevent a major disaster, i.e. a deal falling over because the purchaser does not have the right amount of funds to complete settlement, or the proper approval to buy land in Queensland. It's crucial that the purchaser understands their position BEFORE they sign a contract.

Why this matters in practice.

1. Contracts should include FIRB clauses. If a foreign buyer needs FIRB approval, the contract should be subject to that condition. 

2. Budget for AFAD - foreign buyers should put aside extra funds for this surcharge, as it can materially affect settlement figures significantly.

3. Check exemptions carefully. Not all foreign persons or transactions are treated the same. Early identification of the foreign status and associated duties or approvals, avoid last minute snags that can kill a deal before settlement, or cause lots and lots of unnecessary stress.

Top takeaways.

1. AFAD is a Queensland surcharge on foreign residential buyers. Currently 8% on top of transfer duty 

2. FIRB approval must usually be obtained before entering into a contract if the buyer is foreign.

3. From 2025 to 2027, most foreign persons cannot purchase established dwellings unless an exemption applies.

4. New Zealand citizens with a subclass 444 visa may be exempt from FIRB and AFAD in certain cases.

Empire Legal's advice.

Nothing kills a property transaction faster than missing a tax or approval requirement. If you are advising foreign buyers or dealing with contracts that might involve FIRB or AFAD liabilities, get advice before the contract is signed, not after. Whether it's drafting the right conditions, calculating duties, or navigating exemptions, pre-settlement planning is everything.

Guys, that's it for this week. I'm going to pop some resources in the blog. So if you click the link and want to learn more, you can have a look at AFAD, FIRB, otherwise Queensland Revenue Office - contact them for all questions.

Keep in mind, this is general advice, so contact the relevant bodies if you need help.

We don't do the FIRB approvals ourselves, but we do have a couple of other law firms that we've worked with in the past that have done a great job. If you need help, we can point you in the right direction. Thanks again, everybody. We'll see you next week. And don't  forget - YouTube gods really like it if you interact with the content to help other people find it.

If I've added any value to you over the last few years of this content, it would mean a lot if you could just engage in one way or another. A quick like, or a comment or a share. Thanks. See you next week.

What you want when you're picking a provider to work with is a trusted choice. If you're thinking about engaging someone else, just Google them. Read their reviews. That'll be the true test, what the public says about that company. All the information you need to get started is on our website. Check out our Instagram and if we look like a good fit for your brand, all you need to do is refer us to your clients and we'll take care of the rest.

Empire Legal - happy to help. Queensland's trusted choice for conveyancing. Over 2,900 Google reviews with a five star average. There's not many firms out there that have that five star average. With that many reviews, guys, and not to mention over 16,000 deals settled. Thanks guys. We'll see you next week.

Finally, if you haven't heard, we've launched our podcast. It's called Raising the Bar, where we story tell excellence in Queensland property. Here is the link to listen. If you prefer to watch, here is the YouTube link.

Also, stay up to date with our miniseries on Seller's Disclosure.

Thanks guys. We'll see you next week!

If you know anyone that is involved in Queensland property, or is just genuinely curious - send them our page, send them our channel. It's all free content. We just want to help you be armed with the tools to make good decisions. Check out our website for more blogs. We've got over 100! 

We want to help you. If you've been listening to us for a while, but you haven't made contact, please do! We want to help people buy and sell homes and deliver QLD's best conveyancing experience. Thanks guys, we'll see you next week.

Subscribe to our YouTube and our blog. We're giving out this content for FREE to help you and your peers. Spread the good word of Empire Legal. We want to help everyone make property law in Queensland easy and smooth sailing. 

If you have any questions, you can email me: george@empirelegal.com.au. 

If this has added value, please share this blog / the YouTube video with a friend. 

Thanks for reading everybody. See you on the next one.

Ladies and gentlemen, please keep in mind that all advice is general in nature and does not constitute legal advice. This is authorised by George Sourris, Empire Legal, Brisbane, Queensland, Australia.

---------------------------------------

We can help…

For simple, sunny, smooth sailing conveyancing - Empire Legal.

We look forward to continuing to help thousands of Queenslanders every year with their conveyancing!

Any questions? Want to know more? Get in contact with us via the below form or via info@empirelegal.com.au.

Note: all information is general in nature and as each matter is unique please contact our office for tailored advices: the above does not constitute legal advice.