Overview of Australia’s Foreign Investment Ban (Effective 1 April 2025)

Effective from April 1, 2025, the Australian government will implement a temporary ban on foreign investors purchasing established residential properties. This measure, set to last until March 31, 2027, aims to alleviate housing affordability issues by increasing the availability of existing homes for Australian residents.

Scope of the Ban

The ban applies to all foreign persons, including temporary residents and foreign-owned companies, seeking to acquire established dwellings in Australia. Previously, certain exemptions allowed foreign investors to purchase established properties under specific conditions, such as temporary residents buying a home for personal use during their stay. Under the new regulations, these exemptions will be suspended for the duration of the ban.

Exceptions to the Ban

While the ban is comprehensive, the government has outlined limited exceptions:

– Investments that enhance housing supply (e.g., construction of new dwellings) may be permitted.

– Purchases under the Pacific Australia Labour Mobility (PALM) Scheme are exempt.

Additionally, the following groups remain unaffected by the ban:

– Permanent residents of Australia.

– New Zealand citizens.

– Spouses of Australian citizens, permanent residents, or New Zealand citizens (if purchased as joint tenants).

Enforcement and Compliance

To ensure adherence, the Australian Taxation Office (ATO) and Treasury will enhance compliance measures:

– Increased funding of $5.7 million over four years for enforcement.

– Audit programs to ensure vacant residential land is developed.

Review and Potential Extension

The government plans to review the ban before March 31, 2027, to assess its impact on housing affordability.

The ban may be extended or adjusted based on the findings.

Implications for the Housing Market

The ban is expected to free up approximately 1,800 properties annually for local buyers, potentially easing competition and improving affordability.

This initiative reflects the Australian government’s commitment to prioritizing housing access for local residents while ensuring foreign investments contribute positively to housing supply.

To discuss any related property matter herein or other issues, please contact
Mark Ruttner, Managing Director

mr@fvg.com.au 0411 419 674

First Valuation Group
Suite 110/181, St Kilda Road, St Kilda, Victoria, 3182
valuations@fvg.com.au