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    Foreign Buyer Considerations

    Extra taxes and restrictions that apply to foreign purchasers in Australia

    What is Foreign Buyer Considerations?

    Foreign persons purchasing residential property in Australia face additional surcharges on top of standard stamp duty, plus annual foreign investor land tax surcharges. FIRB (Foreign Investment Review Board) approval is also required. These costs significantly affect investment returns and must be modelled carefully.

    How it works

    1. 1FIRB approval: all foreign persons must apply to FIRB before purchasing residential property
    2. 2FIRB application fee: $14,100–$1,047,500+ depending on property value
    3. 3Foreign purchaser duty surcharge on top of standard duty: NSW 9%; VIC, QLD and TAS 8%; WA and SA 7%
    4. 4Most states also charge foreign owners an annual land tax surcharge; rates vary by state
    5. 5Temporary residents: some exemptions for PPOR if living in Australia on a valid visa

    Worked example

    $800,000 home in NSW. Standard transfer duty: $30,187.
NSW foreign purchaser surcharge duty: 9% × $800,000 = $72,000.
Total duty: $102,187, against $30,187 for an Australian resident (stamp duty calculator).
NSW also charges foreign owners an annual land tax surcharge on top of land tax, with no tax-free threshold.

    Pros

    • Access to Australian property market with strong long-term fundamentals
    • Hedging against currency movements in home country

    Cons

    • Extremely high upfront and ongoing tax costs
    • FIRB restrictions limit purchase types (generally new dwellings only for non-residents)
    • Resale: surcharges not recoverable, permanently reduces return

    Risks

    • Policy risk: surcharges have increased multiple times in recent years
    • Non-compliance with FIRB: civil and criminal penalties
    • Currency risk: AUD movements affect return in home currency

    Tax treatment

    All surcharges are non-deductible for income tax purposes (they are capital costs that may be added to cost base for CGT). FIRB application fee: non-deductible. Foreign investor land tax surcharge: deductible as an investment property expense. CGT: standard rules apply, withholding tax (12.5%) applies to proceeds if non-resident at time of sale.

    Official references

    Keep exploring

    Read property guides on the blog All strategies

    General Advice Warning

    The information on this site is general in nature and does not consider your personal circumstances, financial situation, or needs. Before acting on any information, you should consider its appropriateness having regard to your own situation and seek professional advice from a licensed financial adviser, mortgage broker, accountant, or solicitor.