Buying Property in Australia: Foreign Buyer Costs & Process 2026
Updated: Sep 28
Who counts as a foreign buyer, what you can and cannot buy, how FIRB approval works, the surcharges and taxes you pay, and the step-by-step buying process
Overview
Buying Australian property as a foreign or temporary resident is entirely possible, but it runs on a different set of rules from a local purchase. Foreign buyers face restrictions on what they can buy, must obtain government approval before they buy, pay additional surcharges and taxes, and borrow under tighter conditions. Get these rules right and the process is straightforward; misunderstand them and you can waste time on properties you cannot buy, or face unexpected costs and penalties.
This guide sets out the framework a foreign buyer needs: who counts as a foreign person, what you are and are not allowed to buy, how the Foreign Investment Review Board (FIRB) approval process works, the full cost of being a foreign buyer, how financing works for non-residents, the step-by-step buying process, the state-by-state differences, and the tax obligations that follow. It is national in scope, so it applies whether you are looking at Sydney, Melbourne, Brisbane, Perth or anywhere else.
The single most important principle: foreign buyers are generally steered toward new housing, must get FIRB approval first, and pay more in surcharges and taxes than residents. Everything else in this guide flows from that.
1. Who Counts as a Foreign Buyer
Your obligations depend on your status, and the categories matter:
Australian citizens — buy freely, no FIRB, no foreign surcharge.
Permanent residents (PR) — effectively treated like citizens for property: buy established or new dwellings, no FIRB, no foreign surcharge.
Temporary residents — on a temporary visa (work, student, etc.); face FIRB and, in most states, foreign surcharges, and are subject to restrictions on established dwellings.
Foreign non-residents — living overseas with no Australian visa; the most restricted category, generally limited to new dwellings and vacant land, with full FIRB and surcharges.
Note that being a foreign buyer is about your residency and visa status, not your nationality. A Hong Kong citizen who is an Australian PR buys as a resident; an Australian-born person living overseas long-term may be a foreign resident for tax purposes. Confirm your exact status before you plan a purchase, because it determines everything that follows.
A related concept is tax residency, which is separate from immigration status and is decided by your circumstances and time in Australia rather than by your visa alone. You can be a temporary visa holder yet an Australian tax resident, or an Australian citizen living abroad who is a foreign resident for tax. Tax residency drives how your rental income and capital gains are taxed, including whether the 50% CGT discount applies. Because immigration status and tax residency can point in different directions, a foreign buyer should establish both, ideally with an accountant, before modelling any purchase.
2. What You Can and Cannot Buy
This is the rule most often misunderstood. In broad terms, foreign persons are directed toward housing that adds to supply:
New dwellings — foreign buyers can generally buy new (never previously occupied) dwellings and off-the-plan property.
Vacant land — can generally be bought subject to a condition to build within a set time, so it is not left idle.
Established (second-hand) dwellings — broadly restricted for foreign persons; a ban on foreign persons (including many temporary residents) purchasing established dwellings has been in effect, with limited exceptions, so this is an area to verify carefully with FIRB as the current position applies.
Redevelopment — buying to demolish and build more dwellings can be allowed under conditions, as it increases housing stock.
The logic throughout is that foreign investment should add new housing rather than compete with residents for existing homes. For most foreign buyers this means the realistic search is new apartments, townhouses, house-and-land packages and off-the-plan stock. Because the rules around established dwellings have tightened and can change, always confirm the current position with FIRB or a lawyer before committing to any established property.
In practice, the new-dwelling focus shapes the whole search. Off-the-plan apartments and house-and-land packages are marketed heavily to foreign buyers precisely because they qualify, which is convenient but also a caution: the fact that a project is aimed at foreign buyers says nothing about whether it is well located or fairly priced. Apply the same scrutiny you would to any purchase, developer track record, genuine local demand, and a supply pipeline that is not flooding the area, rather than assuming a foreign-buyer-friendly project is automatically a good buy. Qualifying for FIRB and being a sound investment are two different things.
3. The FIRB Approval Process
Foreign buyers must obtain FIRB approval before they purchase (or buy subject to FIRB approval as a contract condition). The essentials:
Apply first — approval must be in place before you are bound; buying without it can bring serious penalties.
Application fee — tiered by property value, from around A$15,000+ for lower-priced dwellings and rising with price; higher-value purchases pay substantially more.
Processing time — commonly around 30 days, sometimes longer, so build it into your timeline.
Conditions — approval typically comes with conditions (for example, building within a set period on vacant land, or not renting out certain approvals as agreed).
One property at a time — approvals are generally specific to a property or a defined search, not an open-ended licence.
Practically, this means a foreign buyer either secures FIRB approval before making an offer, or makes any offer conditional on FIRB approval, and always leaves enough time for processing. The application is made through the Australian Taxation Office's foreign investment system, and a conveyancer experienced with foreign buyers can guide it. Do not treat it as a formality, it is a legal precondition with penalties for getting it wrong.
3.1 Why the penalties matter
The consequences of ignoring the foreign-investment rules are serious, not administrative. Buying an established dwelling you are not entitled to, or purchasing without required approval, can lead to forced disposal of the property and significant financial penalties, and the framework is actively enforced. This is why the safe approach is always to obtain approval first, or to make any contract explicitly conditional on FIRB approval, and to have a conveyancer confirm your eligibility for the specific property. The cost of getting advice is trivial next to the cost of an unwind, so never treat FIRB as a box-ticking afterthought.
4. The Costs of Being a Foreign Buyer
Foreign buyers pay several costs a resident does not. Budget for all of them:
Foreign purchaser stamp-duty surcharge — an extra duty on top of normal stamp duty, varying by state: roughly NSW 9%, VIC/QLD/TAS 8%, WA/SA 7%, ACT around 4%, and NT currently none.
FIRB application fee — as above, tiered by value.
Land tax and absentee/foreign surcharge — annual land tax on investment property (thresholds vary widely by state), plus an absentee or foreign owner surcharge in several states.
Vacancy fee — a federal annual vacancy fee applies to foreign-owned dwellings left unoccupied or unavailable for rent more than six months in a year.
The usual costs — conveyancer, building and pest inspection, loan fees, council rates, strata/body corporate and insurance.
Added together, a foreign buyer's upfront cost can run 15% to 25% above the equivalent resident purchase, and the ongoing surcharges (land tax plus absentee surcharge, and the vacancy fee if applicable) continue every year. The surcharge alone is significant, on a A$1 million purchase in NSW, the 9% foreign surcharge is around A$90,000. Always model the full cost, not just the price, before you commit.
4.1 A worked cost example
Take a A$900,000 new apartment bought by a foreign resident in NSW (figures illustrative). On top of the ordinary stamp duty, the roughly 9% foreign surcharge adds about A$81,000, and the FIRB fee adds another five figures. So before conveyancing and inspection, being a foreign buyer has added well over A$90,000 to the entry cost. Each year thereafter, land tax plus the absentee surcharge applies, and a vacancy fee is charged if the property sits empty more than six months. Compared with a resident buying the same apartment, who pays none of the surcharge or FIRB fee and faces a higher land-tax threshold, the gap is large, and it is exactly why the price tag alone is a misleading guide to what a foreign purchase really costs.
5. Financing as a Non-Resident
Borrowing is tighter for foreign and non-resident buyers:
Lower LVR — non-resident loans are often capped around 60–70%, meaning a larger deposit than a local would need.
Fewer lenders and higher rates — not all banks lend to non-residents, and those that do may charge more and scrutinise overseas income closely.
Currency and documentation — foreign-currency income, exchange rates and source-of-funds documentation all factor into approval.
Pre-approval matters — especially at auction, where there is no cooling-off and no finance escape.
Many foreign buyers use a mortgage broker who specialises in non-resident lending to identify which lenders will work with their status and income. Sort your finance and pre-approval before you start making offers, and set your budget from your real borrowing capacity, not from the asking prices you see.
Two mechanics deserve attention. The deposit, usually around 10% on exchange, must be available and transferred into Australia in time, which for an overseas buyer means planning the currency conversion and transfer in advance. And because you are converting your home currency into Australian dollars for both the deposit and the balance, the exchange rate directly affects your true cost, a large swing can add or subtract meaningfully on a big purchase. Keep clear records of the source of your funds, as these are routinely examined at settlement and by lenders, and consider moving money in stages to manage timing rather than converting a large sum at a single, possibly unfavourable, moment.
6. The Buying Process, Step by Step
For a foreign buyer, the process runs roughly as follows:
1. Confirm your status and what you can buy — foreign/temporary/PR, and new-only or otherwise.
2. Arrange finance pre-approval — through a non-resident lender or broker.
3. Search within the allowed stock — typically new dwellings and off-the-plan.
4. Apply for FIRB approval — before buying, or make the offer conditional on it.
5. Make an offer or bid — by private treaty (with cooling-off in most states) or at auction (no cooling-off).
6. Engage a conveyancer or lawyer — to review the contract and disclosure documents (for example Victoria's Section 32) and handle settlement.
7. Pay the deposit — usually around 10% on exchange, held in trust.
8. Settle — pay the balance and complete the transfer, weeks later (much later for off-the-plan), with FIRB approval and funds in place.
The two points foreign buyers most often get wrong are skipping FIRB timing and bidding at auction without full readiness. Auctions are binding with no cooling-off, so all due diligence, inspection, contract review and finance must be complete before you bid, and FIRB approval (or a conditional contract) must be sorted.
The conditional contract is a foreign buyer's main safety tool in a private-treaty purchase. Making an offer subject to FIRB approval, and subject to finance and to a satisfactory inspection, means you can withdraw cleanly if any of those fall through, without losing your deposit. It is one reason many foreign buyers prefer private sales to auctions, where no such conditions apply. Have your conveyancer draft or review these conditions carefully, since they are the difference between a manageable exit and a lost deposit if something in the approval or finance does not come together as expected.
7. State Differences That Matter
Australia's property rules are partly federal (FIRB, vacancy fee, national tax) and partly state-based (stamp duty, land tax, cooling-off). The state you buy in changes your costs:
Foreign stamp-duty surcharge — highest in NSW (about 9%), none currently in NT; the rest sit in between.
Land-tax thresholds — vary enormously, from a very low threshold in Victoria to over A$1 million in NSW, changing when annual land tax starts to bite.
Absentee/foreign land-tax surcharge — applied by several states on top of ordinary land tax.
Cooling-off periods — differ by state (for example around 5 business days in NSW, 3 in Victoria, 2 in SA, none in WA or Tasmania), and never apply at auction.
Disclosure documents — differ by state (Victoria's Section 32 Vendor's Statement, for instance).
Because the surcharge and land-tax settings differ so much, the same property can carry a very different total tax burden depending on the state. Factor this into any comparison between cities or states, a lower headline price in a high-surcharge, low-land-tax-threshold state may cost more overall than it first appears.
For an overseas buyer choosing between cities purely on investment grounds, this means the state comparison should be run in after-tax terms. Convert each option into the total you actually pay to enter and hold, and the net return you actually keep, and only then compare. It is common for a property that looks cheaper or higher-yielding on the surface to fall behind once the foreign surcharge, FIRB fee and annual land-tax surcharge are properly counted, and the reverse is also true. The point is not that any one state is best, but that the decision must be made on complete numbers rather than headline price or advertised yield.
8. Tax Obligations as a Foreign Owner
Owning Australian property brings ongoing tax obligations, and foreign residents are treated less favourably than residents on several fronts:
Rental income — taxable in Australia; foreign residents are taxed from the first dollar (no tax-free threshold) and at non-resident rates.
Capital gains tax (CGT) — payable on the gain when you sell; foreign residents do not get the 50% CGT discount that residents enjoy on assets held over a year.
Foreign-resident CGT withholding — since 1 January 2025, the buyer must withhold 15% of the sale price on a purchase from a foreign resident (no threshold), which the seller reconciles at tax time.
Negative gearing — deductions for investment losses are subject to reform: broadly, established dwellings acquired after a set date face limits on offsetting losses against salary from a future date, while new builds are treated more favourably, verify the current rules, as this area is changing.
Depreciation — investors in new dwellings can claim capital works and plant-and-equipment depreciation, improving after-tax returns.
The upshot is that a foreign owner pays more tax entering, holding and exiting than a resident. This is not a reason to avoid Australian property, but it is a strong reason to plan with an accountant familiar with non-resident taxation, and to hold for the long term so the higher entry costs are spread over time.
A practical planning point follows from all this: the timing of a purchase or sale around a change in your residency status can materially change your tax bill. Becoming a resident before selling may restore access to the CGT discount; buying before residency locks in the foreign surcharge. None of this should drive a decision on its own, but it should be modelled, because for a foreign owner the tax treatment is a large part of the total return, not a footnote. An accountant who handles non-resident and expatriate cases can run these scenarios before you act.
9. Recent Rule Changes to Know
The foreign-buyer landscape has shifted in recent years. Key changes to be aware of (and to verify as current before you rely on them):
Established-dwelling restrictions — measures restricting foreign persons from buying established dwellings have tightened; confirm the current position with FIRB.
Foreign-resident CGT withholding — raised to 15% with no threshold from 1 January 2025.
Vacancy fee — the federal annual vacancy fee for under-used foreign-owned dwellings has been reinforced.
Negative gearing reform — changes affecting established dwellings acquired after a set date, with new builds treated more favourably.
SMSF borrowing — restrictions on self-managed super funds borrowing to buy residential property have tightened.
Because these rules change with government policy, treat any specific figure or cut-off date as something to confirm at the time you buy, not a fixed fact. The direction of travel has generally been to steer foreign investment toward new housing and to increase the cost of holding property under-used, so plan on that basis.
Keeping current on these rules is itself part of the process. Government policy on foreign investment in housing responds to affordability pressures and can change between the time you start looking and the time you settle, particularly on established-dwelling access, surcharge levels and vacancy penalties. A conveyancer or accountant who works with foreign buyers will know the position at the time you transact, which is exactly why this guide repeatedly points you to confirm the specifics rather than rely on a figure that may have moved. Build that verification step into your plan and you will not be caught out by a change you did not see coming.
10. Three Scenarios
10.1 The overseas investor
You live overseas and want an Australian investment property. You are limited to new dwellings and vacant land, must get FIRB approval, and pay the foreign surcharge, land tax with absentee surcharge, and the vacancy fee if you leave it empty. Model the full cost, choose a state and property where the after-tax return still works, and hold long term to absorb the upfront foreign costs.
For this buyer, the single biggest lever is patience with residency. If there is any realistic path to permanent residency, comparing the cost of buying now as a foreign person against buying later as a resident, free of the surcharge and FIRB fee and with access to established homes and the CGT discount, can reveal a very large difference. That does not always favour waiting, market movements and personal circumstances matter too, but it is a calculation every prospective foreign buyer with a residency pathway should run before committing.
10.2 The temporary resident
You are in Australia on a work or student visa. You face FIRB and surcharges and are subject to the established-dwelling restrictions, so plan around new stock unless a current exception clearly applies. If PR is on your horizon, weigh whether waiting until you become a resident, removing the surcharge and FIRB, is worth it before you buy.
10.3 The expat returning home
You are an Australian who has lived overseas and may be a foreign resident for tax purposes. Check your residency status carefully, because it affects CGT (the 50% discount), the withholding on any sale, and your surcharge exposure. Timing a purchase or sale around a change in your residency status can materially change your tax outcome.
11. Common Mistakes
Assuming nationality decides it — it is your residency/visa status, not your passport, that sets the rules.
Searching established homes you cannot buy — foreign buyers are steered to new stock; confirm before you fall for a listing.
Skipping or mistiming FIRB — approval must be in place before you are bound; penalties apply for getting it wrong.
Ignoring the surcharge and land tax — they can add 15–25% upfront and recur annually.
Bidding at auction unprepared — no cooling-off means no way out; complete everything first.
Overlooking the tax on exit — no 50% CGT discount and 15% withholding make selling costlier than expected.
12. FAQ
Q1. Can foreigners buy property in Australia?
Yes, but generally only new dwellings and vacant land (with a build condition), with FIRB approval required first, while established dwellings are broadly restricted for foreign persons.
Q2. Do I need FIRB approval?
If you are a foreign or temporary resident, yes, approval must be in place before you are bound, and buying without it can bring serious penalties.
Q3. How much extra does a foreign buyer pay?
Typically 15–25% more upfront, driven by the foreign stamp-duty surcharge (about 4–9% by state) and the FIRB fee, plus annual land-tax surcharges and a possible vacancy fee.
Q4. Does my nationality matter?
No, what matters is your residency and visa status, a foreign national who is an Australian PR buys as a resident, while an Australian living overseas may be a foreign resident.
Q5. Can temporary residents buy an established home to live in?
Restrictions on foreign persons buying established dwellings have tightened, so any exception must be confirmed as current with FIRB before you rely on it.
Q6. What taxes do foreign owners pay?
Tax on rental income (no tax-free threshold), CGT on gains without the 50% discount, 15% withholding on sale, plus the surcharges and vacancy fee, all more than a resident pays.
Q7. How long does FIRB take?
Commonly around 30 days, sometimes longer, so apply early or make your offer conditional on FIRB approval and build the time into your settlement schedule.
Q8. Which state is cheapest for a foreign buyer?
It varies, NT has no foreign stamp-duty surcharge while NSW is highest, and land-tax thresholds differ hugely, so compare the full surcharge and land-tax burden, not just the price.
Q9. Can I get a loan as a non-resident?
Often yes, but at a lower LVR (around 60–70%), from a smaller pool of lenders and sometimes at higher rates, so use a broker who specialises in non-resident lending and get pre-approval early.
Q10. Is tax residency the same as visa status?
No, tax residency is decided separately by your circumstances and time in Australia, and it drives how your income and gains are taxed, so establish both your visa status and tax residency before buying.
Q11. Do I pay tax if I leave the property empty?
Potentially yes, a federal annual vacancy fee applies to foreign-owned dwellings left unoccupied or unavailable for rent for more than six months in a year, on top of land tax.
13. Foreign Buyer Checklist
Before you commit:
Confirm your status — foreign, temporary or resident, and what you can buy.
Search allowed stock — generally new dwellings and vacant land.
Arrange non-resident finance — pre-approval and a realistic budget.
Apply for FIRB — before buying, or make the offer conditional.
Cost the full purchase — surcharge, FIRB fee, land tax and absentee surcharge, vacancy fee.
Engage a conveyancer — to review the contract and disclosure and handle settlement.
Plan the tax — rental income, CGT, 15% withholding, with an accountant.
Verify current rules — established-dwelling limits and reforms change; confirm at the time.
Conclusion: Different rules, not closed doors
Australia remains open to foreign property buyers, but on its own terms: new housing rather than established homes, approval before purchase, and higher surcharges and taxes than a resident pays. None of this makes buying impossible, it simply makes preparation essential. The foreign buyers who do well are the ones who confirm their status, search the stock they are allowed to buy, get FIRB and finance sorted early, count the full cost, and plan the tax.
Know what you can buy, get FIRB approval, budget for the surcharges and land tax, and hold for the long term — follow that path and the process is manageable and the rules navigable. Treat the framework in this guide as your starting map, then confirm the specifics with FIRB, a conveyancer and an accountant for your own situation, because in foreign-buyer property, the details, and the current rules, are everything.
It is worth ending on perspective. Yes, the rules are more involved for foreign buyers, but they are clear, consistent and navigable, and thousands of overseas buyers complete Australian purchases every year by following them. The difference between a smooth purchase and a costly one is almost always preparation: knowing your status, buying the right stock, securing FIRB and finance early, and pricing in the full cost before you fall for a property. Do that homework and Australia is very much open for business to foreign buyers, on terms you can plan around with confidence.
A final note: FIRB rules, surcharge rates, land-tax settings and tax reforms vary by state and change over time; this is general information only, not legal, tax or migration advice. Confirm the current position with FIRB, and engage a licensed conveyancer or lawyer and a registered accountant for your specific circumstances before buying.
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