Can Foreigners Buy Property in Australia? What Americans Need to Know

If you’re an American dreaming of owning a slice of the Australian lifestyle—whether it’s a beachside apartment in Sydney or a cozy home in Melbourne—you’re not alone. But before you start browsing listings, it’s important to ask: can foreigners buy property in Australia? The answer is yes, but with some important rules, restrictions, and tax implications to consider. In this guide, we’ll walk you through everything U.S. citizens need to know about buying property in Australia, from legal requirements to financing and taxes, so you can make informed decisions with confidence.

Understanding Foreign Investment Review Board (FIRB) requirements and approval process

Australia welcomes foreign investment, but it also has strict regulations to ensure that property purchases by non-residents align with national interests. The Foreign Investment Review Board (FIRB) is the government body responsible for reviewing and approving property purchases by foreigners—including Americans.

Who needs FIRB approval?

• If you are not an Australian citizen or permanent resident, you must apply for FIRB approval before purchasing residential real estate.
• This applies to U.S. citizens, even if you already live in Australia on a temporary visa.

What does the FIRB look for?

• The FIRB’s main goal is to ensure that foreign investment benefits Australia, such as by increasing housing supply or supporting economic growth.
• Approval is generally granted for new properties, vacant land (with a requirement to build within a certain timeframe), or properties for redevelopment.
• Buying established (existing) homes is usually restricted to those with specific visas or for certain purposes, such as temporary residents intending to live in the property.

The approval process

• Submit an online application through the FIRB website before signing a contract (or make the contract conditional on FIRB approval).
• Pay the required application fee, which varies based on the property’s value.
• Wait for a decision—most applications are processed within 30 days, but cases may take longer.

Penalties for non-compliance

• Failing to obtain FIRB approval can result in hefty fines or forced sale of the property, so it’s crucial to follow the rules from the outset.

Property types Americans can and cannot purchase in Australia

Understanding what you can and cannot buy is key to a smooth property search. Here’s a breakdown for U.S. citizens:

Properties you can buy

• New dwellings: Apartments, townhouses, or houses that have never been sold or occupied. These are generally approved to encourage new housing supply.
• Vacant land: You can buy land, but you must commit to building a new dwelling within four years.
• Off-the-plan properties: Buying a property before it’s built (off-the-plan) is usually allowed, provided it will be a new dwelling.

Properties with restrictions

Established (existing) dwellings: Generally, foreigners cannot buy existing homes unless:

• You hold a temporary resident visa and intend to live in the property while in Australia.
• The property will be redeveloped to increase housing stock (e.g., replacing a single house with multiple units).

Commercial property

• Commercial real estate (offices, retail, industrial) is subject to different rules and higher value thresholds before FIRB approval is required. Many commercial purchases are allowed, but always check the latest regulations.

Step-by-step guide to applying for FIRB approval as a U.S. citizen

Navigating the FIRB process can feel daunting, but breaking it down into clear steps makes it manageable:

1. Identify the property type

Confirm whether the property is new, off-the-plan, vacant land, or established. This determines your eligibility and the likelihood of approval.

2. Prepare your application

• Gather required documents: passport, visa details (if applicable), property details, and contract (if available).
• Visit the FIRB website to access the online application portal.

3. Submit the application

• Complete the online form, providing accurate information about yourself and the property.
• Pay the application fee. As of 2025, fees start at AUD 14,100 for properties valued up to AUD 1 million, and increase for higher-value properties.

4. Await the decision

• Most applications are processed within 30 days, but allow extra time for complex cases.
• You may be asked for additional information or clarification.

5. Receive approval and finalize the purchase

• Once approved, you can proceed to settlement. Make sure your contract is conditional on FIRB approval to protect your deposit.

6. Comply with ongoing obligations

• If you bought vacant land, you must begin construction within four years.
• Temporary residents must sell the property when leaving Australia (unless they become permanent residents).

Recent policy changes: New restrictions on foreign property investment

Australia’s property market is dynamic, and regulations for foreign buyers have tightened in recent years. Here’s what Americans need to know about recent changes:

• Increased FIRB fees: Application fees have risen significantly, especially for higher-value properties, to deter speculative investment and support housing affordability.
• Stricter enforcement: The Australian government has ramped up monitoring and enforcement, with more audits and higher penalties for non-compliance.
• Vacancy and land taxes: Some states (like Victoria and New South Wales) have introduced additional taxes on properties left vacant or owned by foreign buyers, to encourage active use and increase housing supply.
• Limits on established dwellings: The rules around buying existing homes remain strict, with very few exceptions for non-residents.

Staying up to date with these changes is essential, as policies can shift quickly in response to market conditions and political priorities.

Tax implications for American property buyers in Australia

Buying property in Australia as a U.S. citizen brings unique tax considerations—both in Australia and back home. Here’s what you need to know:

Australian taxes

• Stamp duty: A one-time tax paid on property purchases. Foreign buyers often pay a surcharge (up to 8% extra, depending on the state).
• Land tax: An annual tax on property ownership, with additional surcharges for foreign owners in some states.
• Capital gains tax (CGT): If you sell the property for a profit, you may owe CGT in Australia. Foreign owners are not eligible for some exemptions available to residents.
• Rental income tax: If you rent out the property, rental income is taxable in Australia. You’ll need to file an Australian tax return and may be subject to withholding tax.

U.S. tax considerations

• Worldwide income: As a U.S. citizen, you must report global income—including Australian rental income and capital gains—on your U.S. tax return.
• Foreign tax credits: You can usually claim a credit for Australian taxes paid, helping to avoid double taxation.
• FATCA and FBAR reporting: If you hold the property through a foreign bank account or entity, you may have additional U.S. reporting requirements.

Financing options and mortgage requirements for U.S. residents

Securing financing as a foreigner in Australia is possible, but it comes with extra hurdles. Here’s what to expect:

Mortgage availability

• Some Australian banks and lenders offer mortgages to non-residents, but options are more limited than for locals.
• You may need a larger deposit—often 20-30% of the property value.
• Interest rates for foreign buyers can be higher, and lending criteria are stricter.

Documentation required

• Proof of income and employment (U.S. tax returns, pay stubs, bank statements)
• Valid passport and visa (if applicable)
• Evidence of assets and liabilities

Currency considerations

If your income is in U.S. dollars, be mindful of exchange rate fluctuations, which can affect your repayments and overall costs.

Alternative financing

Some buyers use equity from U.S. property, personal savings, or international lenders specializing in expat mortgages.

Ready to make your Australian property dream a reality? Get expert guidance every step of the way

Buying property in Australia as a U.S. citizen is exciting—but it’s also complex, especially when it comes to tax and compliance. Don’t navigate it alone. Our team of expat tax experts is here to help you understand your obligations, minimize your tax burden, and ensure a smooth, stress-free experience from start to finish.

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