In this blog/video we discuss the brand new law that has BANNED FOREIGNERS from buying exisiting property in Australia for two years, starting 01/04/2025.

We also explain some of the barriers to entry for foreigner buyers, such as AFAD, FIRB and annual vacancy fees, as well as provide a working example of what the fees would cost for a $1m purchase for a foreign person.

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

Hi everybody - George Sourris, Empire Legal.

Today's topic: Foreigners banned from buying existing homes in Australia for two years! 

On the 16th of February 2025, Labor's Treasurer Jim Chalmers announced a two year ban on the purchase of existing Australian homes by foreign investors, mirroring the Liberal policy.

A "foreigner", for the purposes of this video, is anyone that is not an Australian Citizen or Permanent Resident.

From the 1st of April 2025, foreign investors, including temporary residents and foreign owned companies will no longer be able to purchase an established dwelling in Australia while the ban is in place, unless an exemption applies. After the two year initial period, a review will occur to see if the ban will end or be extended. 

Foreigners will be able to purchase new dwellings to encourage a supply of housing. However, for new developments of 50 units or more, foreign investors are restricted to owning no more than 50 percent of the property, ensuring local buyers and investors maintain a significant stake in the development. 

Keep in mind, foreigners are subject to AFAD, Additional Foreign Acquirer Duty, at 8% of the purchase price. For example, in Queensland, let's just say you're buying a property for a million dollars. That's an additional $80,000 on top of the stamp duty of $30,850.  

Foreigners also need FIRB, or Foreign Investor Review Board approval in order to purchase. In our $1 million purchase example, a new dwelling would attract a $14,700 FIRB fee. And again, that's just for application. There's no guarantee of approval or success. Here is the link in the blog to the FIRB fee schedule, guys.  

Saxon Davidson, Research Fellow of the Institute of Public Affairs, said that the latest ABS data confirms over 1,000 new immigrants arrive in Australia every day under the Albanese Government.  The number of new houses approved remains far below the number of new arrivals, meaning, the great Australian dream of owning a home is being denied to the next generation of Australians and new migrants alike. Foreign buyers spent $4.9 billion Australian dollars purchasing 5,360 pieces of residential land in 2022/23 financial year, accounting for less than 1% of all sales. 

Of that 5,360 sales, approximately 1,800 properties were existing.

Claire O'Neill, Minister for Housing and Homelessness, said the policy was not a "silver bullet" to fix the Australian housing crisis, but would make thousands more homes available to local buyers.

Foreign owners of property that remain vacant for six months or more in a year are subject to an annual vacancy fee. This is to discourage "land banking", where foreign investors hold on to properties without using or developing the properties, driving up housing prices and limiting availability for local buyers. For vacancy years starting 9th of April 2024, the fee has doubled for foreigners, to a whopping $26,400 per annum.

As you can see, there are many expensive barriers for foreign purchasers. This new two year ban for foreigners buying established dwellings will allow Australians a fair go to unlock at least a couple thousand extra properties per year to purchase without needing to compete with cashed up foreigners.

Whilst some are bagging this policy, saying it's a political stunt or a gimmick, this solicitor personally thinks that it's a good thing for Australians. I agree with our Minister for Housing, that it is not a silver bullet, but it will definitely help move the needle in the right direction for Aussies wanting to buy homes. 

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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.

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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.