Foreign Buyer Ban on Established Homes Extended to 2029

Australia’s restrictions on foreign purchases of established homes have been extended, reinforcing the Federal Government’s policy of directing overseas investment toward new housing rather than existing residential stock.

The 2026–27 Federal Budget extended the temporary ban on foreign purchases of established dwellings until 30 June 2029. The restriction originally commenced on 1 April 2025 and applies broadly to foreign persons, including temporary residents and foreign-owned companies, unless a limited exception applies.

The Government’s stated objective is to reduce competition from foreign buyers for established homes while encouraging overseas capital to contribute to additional housing supply. Current foreign investment policy specifically prioritises investment in new dwellings, vacant residential land and projects that increase the number of homes available in Australia.

For foreign investors interested in Melbourne’s western growth corridor, this makes the distinction between established and new property particularly important. Existing homes will generally remain unavailable to foreign purchasers during the ban period, while new dwellings and qualifying developments remain the main pathway into the residential market.

Off-the-plan apartments, newly completed homes and house-and-land packages may therefore become increasingly relevant to overseas buyers seeking exposure to Melbourne’s growth areas.

Vacant residential land can also remain an option, although approvals usually include development conditions. Current foreign investment guidance states that construction on vacant residential land will generally need to be completed within four years and the land cannot normally be sold before construction is completed.

This policy direction could support new developments across Melbourne’s western growth corridor, where a substantial proportion of future housing supply is being delivered through greenfield estates, new townhouses, apartments and master-planned communities.

Foreign demand directed toward newly constructed housing can help developers secure sales, improve project feasibility and support continued construction activity. In turn, this can contribute to housing supply, employment and infrastructure development across fast-growing western suburbs.

However, foreign buyers should not assume that new property can be purchased without regulatory requirements. Foreign investors will generally still need to notify the Australian Taxation Office before acquiring residential land and may need to pay the applicable foreign investment application fee.

They may also face additional Victorian taxes, including Foreign Purchaser Additional Duty and the Absentee Owner Surcharge, depending on their circumstances and whether any exemption applies.

The established-home ban does contain limited exceptions, but these are generally focused on transactions that support additional housing supply or operate at a commercial scale. Examples include certain redevelopment projects that significantly increase housing stock, Build-to-Rent developments, retirement or aged-care accommodation and some employee housing arrangements.

Permanent residents and eligible New Zealand citizens are among those covered by general exemptions from foreign investment screening for residential property, so the rules do not apply to every overseas-born or non-citizen purchaser in the same way.

For Melbourne’s western growth corridor, the extended ban may therefore strengthen the role of new construction as the primary residential investment option for foreign purchasers. Developers marketing new projects internationally may benefit from this policy direction, while established-home sellers are likely to remain focused mainly on domestic and exempt buyers.

Overall, the extension to 30 June 2029 confirms that Australia intends to keep foreign residential investment concentrated on creating additional housing. For overseas investors considering Melbourne’s west, off-the-plan projects, new dwellings and residential land for development are likely to remain the most relevant opportunities under the current framework.