Temporary ban on foreign ownership of housing in Australia

However, foreign persons who meet specific criteria may apply for an approval or an exemption certificate with the Australian Taxation Office (ATO). Where approved, the foreign persons would be allowed to purchase established dwellings.

The ATO confirms that the notable exceptions include:

• Foreign persons who seek to purchase an established dwelling for redevelopment, and where the redevelopment will significantly increase Australia’s housing stock by at least 20 additional dwellings;
• Foreign persons who seek to purchase an established dwelling where the acquisition supports the availability of housing on a commercial scale. This includes (but is not limited to) proposals to acquire an interest in one or more established dwellings in multi-unit developments (such as retirement villages, assisted living or aged care facilities, and student accommodation) on a commercial scale;
• Foreign persons who seek to purchase existing “build to rent” developments, where the development will continue to be operated as build to rent; 
• Purchases by foreign-owned companies to provide housing for their Australian based workers, including those participating in the Pacific Australia Labour Mobility (PALM) scheme; and
• Foreign purchases of established dwellings by permanent residents of Australia, New Zealand citizens, and spouses of Australian citizens, permanent residents, or New Zealand citizens, provided the property is purchased as joint tenants.

Penalties may apply if the foreign persons buy Australian property without first obtaining approval or an exemption certificate from the ATO. It can generally take up to 30 days for the ATO to consider the application upon receipt of the application and payment of the fee from the foreign persons.

The measure aims to ease pressure on Australia’s housing market and increase the availability of existing homes for local buyers by restricting foreign investment. The Australian government will undertake a review before the scheduled end date of 31 March 2027 to determine whether the temporary ban will continue to operate. Depending on the outcome, the ban may be extended or modified.

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Isabella Chin is a qualified CA, CTA and tax lawyer. She commenced her tax career with one of the “Big 4” accounting firms. She works with a diverse range of clients. Her areas of tax expertise include small business tax concessions, restructures, capital gains tax, and tax residency.

Tony Nunes has over 25 years’ experience in providing tax advice to clients, especially on issues affecting cross-border transactions, acquisitions and restructures, and on all aspects of structuring the ownership and financing of corporations and their operations.