Foreign Nationals Buying Property in Australia: FIRB Rules

Foreign nationals can purchase residential property in Australia. The rules governing that purchase are specific, strictly enforced, and non-negotiable. Understanding them before signing anything is essential — proceeding without Foreign Investment Review Board approval is not a technicality that can be fixed after the fact.

What FIRB Is and Why It Applies

The Foreign Investment Review Board administers Australia's foreign investment framework under the Foreign Acquisitions and Takeovers Act 1975. Its purpose is to ensure that foreign investment in Australian assets — including residential property — is in the national interest.

FIRB approval is required before exchanging contracts on any eligible property. It is an application process administered by the Australian Taxation Office (ATO), not an automatic entitlement.

Eligibility criteria, fees, and thresholds are subject to change — confirm current rules at the ATO's foreign investment portal (firb.gov.au) before proceeding.

What Foreign Nationals Can and Cannot Buy

This is the most commonly misunderstood element of foreign property investment in Australia.

Foreign nationals can purchase:

• Newly constructed dwellings (apartments, houses, townhouses) bought from a developer
• Off-the-plan residential properties not yet constructed
• Vacant residential land, subject to a condition that construction begins within a defined period
• Commercial real estate (separate rules and thresholds apply)

Foreign nationals cannot purchase:

• Established residential dwellings for investment purposes
• Existing homes for personal use while living in Australia (with very limited exceptions for temporary residents)

The restriction on established dwellings means the largest and most liquid segment of the Australian residential property market is simply not accessible to foreign national investors.

A newly constructed apartment bought off-the-plan is eligible. An established three-bedroom house in the same suburb is not.

FIRB Application Fees

FIRB application fees are set by the government, updated periodically, and non-refundable regardless of whether approval is granted or refused.

As a guide (confirm current fees at firb.gov.au before applying — fees are subject to change):

Eligibility criteria and thresholds are subject to change — confirm current rules with the relevant authority.

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Surcharge Stamp Duty for Foreign Buyers

Foreign buyers pay surcharge stamp duty in addition to standard stamp duty. This is a state government charge, separate from FIRB fees, and applies to the full purchase price.

Surcharge rates vary by state — confirm current rates with the relevant state revenue office before proceeding:

• New South Wales: 8% surcharge on top of standard duty
• Victoria: 8% surcharge on top of standard duty
• Queensland: 7% surcharge on top of standard duty
• South Australia: 7% surcharge on top of standard duty
• Western Australia: 7% surcharge on top of standard duty

On a $700,000 new apartment in Sydney, a foreign buyer pays standard stamp duty of approximately $27,000 plus an 8% surcharge of $56,000 — total transfer taxes of approximately $83,000. An Australian resident purchasing the same property pays approximately $27,000.

This surcharge significantly affects the financial case for foreign investment in Australian residential property and must be included in any cost model.

The FIRB Application Process

1. Apply through the ATO's foreign investment portal before exchanging contracts

2. Pay the non-refundable application fee

3. Wait for the decision — typically processed within 30 days, but the ATO can extend the review period

4. If approved, conditions are stated — typically confirming the property must be a new dwelling

5. Exchange contracts only after FIRB approval is confirmed in writing

The 30-day timeline matters for off-the-plan purchases where developers may expect contract exchange within 14 days of signing a reservation. Ensure the developer and their solicitor are aware that FIRB approval is required, and negotiate a timeline that accommodates it.

Temporary Residents Face Different Rules

Australian temporary residents — those on work visas, partner visas, or student visas — are not classified as foreign nationals for all FIRB purposes. They may be able to purchase an established dwelling for personal use while residing in Australia, subject to FIRB approval and conditions (typically including a requirement to sell when they depart).

If you hold a temporary visa and are considering a property purchase, the rules depend on your specific visa subclass, the property type, and its intended use. Independent legal advice from an Australian solicitor before signing any contract is essential.

The Step That Must Come Before Signing Anything

FIRB approval must be obtained before exchanging contracts. This is a legal requirement — not a recommended step, not a formality to complete later. Signing a contract of sale without FIRB approval where it is required creates a contract that may be unenforceable, and exposes the buyer to penalties including forced divestiture of the property.

Have a solicitor familiar with Australian foreign investment law review any contract before you sign. The solicitor should confirm whether FIRB approval is required for your specific purchase, and ensure any contract is conditional on FIRB approval being obtained.

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