Updated FIRB Rules for Foreign Property Buyers in Australia

Foreign investors looking to purchase residential property in Australia face a tightly regulated environment, with the Government continuing to direct overseas investment toward new housing rather than established homes. In most cases, foreign persons must notify the Australian Taxation Office and obtain approval before acquiring residential land, regardless of the property’s value.

From 1 April 2025 until 30 June 2029, foreign investors are generally prohibited from purchasing established dwellings in Australia, although limited exceptions apply. The policy is designed to increase housing supply by encouraging foreign investment into new dwellings, off-the-plan properties and vacant residential land intended for development.

For foreign buyers interested in Melbourne’s western growth corridor, this means new developments and house-and-land opportunities may be considerably more accessible than established homes. Growth areas with new estates, vacant residential lots and newly completed dwellings may therefore remain attractive to overseas purchasers who satisfy Australia’s foreign investment requirements.

Vacant land can also be purchased by foreign investors, but approval will generally include conditions requiring construction to be completed within four years. The land typically cannot be sold until the required development has been completed, meaning buyers need a realistic construction plan before committing to the purchase.

This is particularly important in Melbourne’s west, where vacant land and new housing developments are common. Foreign buyers should consider not only the land price but also builder availability, construction costs, finance, permits and the time required to complete the dwelling within the required period.

New and near-new dwellings are generally treated more favourably under the foreign investment framework because they contribute to Australia’s housing stock. In some larger developments, developers may also hold approval allowing eligible foreign purchasers to buy newly developed dwellings without lodging a separate individual investment proposal, although the specific arrangement should always be confirmed before purchase.

Foreign investment application fees also apply and vary depending on the value and type of investment. Current Government guidance confirms that the correct fee must generally be paid before the statutory assessment period begins, so buyers should include these costs when calculating their total property budget.

Foreign owners may also face ongoing obligations after purchasing. Residential properties generally need to be registered on the Register of Foreign Ownership of Australian Assets, and an annual vacancy fee can apply where a foreign-owned dwelling is not occupied or genuinely available for rent for at least 183 days during the relevant year.

For investors targeting Melbourne’s western growth corridor, careful planning is therefore essential. The area can offer attractive opportunities through new estates, off-the-plan properties and vacant land, but foreign buyers need to understand the difference between what is permitted and what is restricted before entering into a contract.

Permanent residents and Australian citizens are treated differently under the rules. Australian permanent residents generally do not require foreign investment approval to purchase residential property, which can significantly change the purchasing options available compared with a foreign non-resident.

Overall, Australia continues to welcome foreign investment in residential property where it contributes to new housing supply. For overseas buyers considering Melbourne’s western growth corridor, the strongest opportunities are likely to remain in new dwellings and appropriately planned developments, while established properties will continue to be largely inaccessible to foreign purchasers during the temporary ban period.