Australia’s Foreign Investment Ban
The Government announced that it will impose a temporary ban on foreign purchases of established dwellings for at least 2 years and crack down on land banking.
Key scope of the ban
From 1 April 2025 to 31 March 2027, foreign persons, including temporary residents and foreign-owned companies, cannot apply to buy an established dwelling in Australia.
This temporary ban on foreign purchases of established dwellings and strengthened compliance activity by the ATO to enforce the ban are aimed at ensuring foreign investment in housing contributes to housing availability and affordability for Australian residents.
Exceptions
The are exceptions that will include investments that significantly increase housing supply or support the availability of housing supply, and for the Pacific Australia Labour Mobility (PALM) scheme.
Other existing exceptions remain in place, such as for purchases by:
- permanent residents
- New Zealand citizens
- spouses of Australian citizens, permanent residents or New Zealand citizens (when purchased as joint tenants).
Enforcement
Foreign investors that have already acquired or are proposing to acquire vacant residential or non‑residential land will be subject to heightened scrutiny by the ATO and Treasury to ensure they comply with development conditions.
Foreign investors are subject to development conditions when they acquire vacant land in Australia to ensure that it is put to productive use within reasonable timeframes. The Government is providing the ATO and Treasury $8.9 million over four years from 2025–26 and $1.9 million ongoing from 2029–30 to implement an audit program and enhance their compliance approach to target land banking by foreign investors.
Future review and policy changes
The ATO and Treasury will publish updated policy guidance prior to the commencement of these changes. A review will also be undertaken to determine whether it should be extended beyond 31 March 2027.