Announced 16 February 2025, the Australian Government announced major changes aimed at temporarily restricting foreign persons looking to purchase established dwelling and cracking down on land banking.
Until now, foreign investors have generally been barred from buying existing property except in limited circumstances, such as when they come to live here for work or study.
If you’re a foreign person looking to buy or sell properties in Australia, it’s essential to understand who is affected and how the new temporary ban impact your plans.
Ban on Foreign Person Buying Established Homes
From 1 April 2025 to 31 March 2027, foreign persons, including temporary residents and foreign-owned companies, will be prohibited from purchasing existing residential properties in Australia (“temporary ban”), unless an exception applies.
A full statement of the Australian Government release can be found at:
Albanese Government clamping down on foreign purchase of established homes and land banking
Exceptions to Foreign Person Ban
The following categories are exempted from the temporary ban:
- Permanent residents
- New Zealand citizens
- Spouses of Australian citizens, permanent residents or New Zealand citizens (when purchased as joint tenants)
Foreign Buyers Looking to Purchase Property in Australia
This means foreign buyers, who wishes to buy real estate properties in Australia must look towards alternatives, such as new developments and off-the-plan properties instead.
How HTW Legal Can Help You as a Foreign Buyer
- Assess your eligibility for exemptions under the new rules
- Advise on alternative investment opportunities that comply with regulations
- Provide legal guidance on structuring your property purchases within the law
Crackdown on Land Banking
What is Land Banking?
Land banking refers to the practice whereby an investor or company purchase a block of vacant, undeveloped land in the expectation of selling it in future when its value has increased significantly.
Land Banking in Australia
In Australia, foreign investors who buy vacant land are already required to develop it within a set timeframe. Essentially, the Australian Government is ramping up enforcement to penalise those who don’t meet development conditions, by delaying the development on their purchased vacant land to profit from price increases.
How HTW Legal Can Help You as a Vacant Land Purchaser/Owner
- Ensure your land development plans meet Australian compliance standards
- Assist with navigating development timelines and seeking regulatory approvals if challenges arise
- Provide legal advice on navigating audits and penalties
FAQs: How Will This Affect You?
1. I am a foreign investor — Can I still buy property in Australia?
- Yes, but only new developments and off-the-plan properties. Any purchase of established homes will be off-limits from 1 April 2025 to 31 March 2027 unless an exemption applies.
2. I am a current property owner — Do these changes affect me?
- No, if you already own property, you won’t be forced to sell. However, you may face stricter regulations when expanding your portfolio.
3. I am selling a property to a foreign buyer — Does this impact my sale?
- Yes, from 1 April 2025, foreign buyers won’t be able to purchase your established home. If you’re considering selling, it may be beneficial to act before the ban takes effect.
4. I am a buyer waiting on settlement with a foreign seller — Will my purchase be affected?
- If your contract is signed before the ban comes into effect, it should proceed as usual. However, it’s always best to consult a legal professional to ensure compliance.
5. What happens if a foreign investor buys land but doesn’t develop it?
- The Government is increasing audits and penalties for land banking, meaning investors who fail to develop within the required timeframe could face consequences.
Are You a Foreign Buyer Looking to Purchase Property?
The Australian Government’s new property rules mark a significant shift in Australia’s housing market policies. Whether you’re a foreign investor, a seller, or a developer, ensuring compliance is key to protecting your investments.
At HTW Legal, we understand the complexities of property law and the importance of clear communications for property transactions. Our experienced property conveyancing team specialises in providing tailored legal solutions, ensuring your investments align with the latest regulations.
- Conduct thorough due diligence before you commit to a property investment
- Help you prepare for compliance audits and avoid penalties
- Keep you updated on regulatory changes that could affect your portfolio
📞 Contact HTW Legal Group today for a consultation.
