The Australian government has recently introduced a new property policy that will prohibit foreign persons from purchasing established homes (i.e., second-hand properties) in Australia from 1 April 2025 to 31 March 2027. This move aims to curb land hoarding by foreign investors and ensure better access to the property market for local residents. The announcement has sparked widespread attention and debate.
Policy Background and Key Details
Previously, while foreign buyers faced restrictions on purchasing second-hand homes in Australia, those holding valid temporary visas (such as student or work visas) could still apply for approval through the Foreign Investment Review Board (FIRB). Additionally, foreign investors who purchased vacant land were required to develop it within a specified timeframe, but the enforcement of these rules was relatively weak, with limited penalties for non-compliance.
The new policy marks a significant shift. Starting 1 April 2025, foreign persons (including temporary residents and foreign-owned companies) will be prohibited from buying established dwellings during the ban period, except under specific and exceptional circumstances. This means that even applications submitted to FIRB will no longer be approved. The Australian Taxation Office (ATO) will enforce the ban through its foreign investment compliance team, intensifying scrutiny of all foreign investment proposals and imposing strict penalties for any violations.
Cracking Down on Land Hoarding: Strengthened Oversight
The policy not only restricts foreign persons from purchasing existing homes but also takes a tougher stance on land hoarding. Under current regulations, foreign persons who purchase vacant land must develop it within a reasonable timeframe. However, weak enforcement in the past has allowed some to hold onto land without development, waiting for its value to increase before selling for profit.
With the new policy, the ATO and the Treasury will enhance audits and oversight of land hoarding by foreign investors, strictly identifying and penalising those who fail to develop their land as required. This measure aims to ensure the efficient use of land resources and prevent speculative activities from negatively impacting the property market.
Ban Duration and Future Review
The ban will remain in effect for two years, ending on 31 March 2027. At that time, the government will assess the policy’s effectiveness and market conditions to determine whether an extension will be necessary. During this period, foreign persons will be unable to purchase established dwellings through any means.
Last Chance: Applications Accepted Until 1 April 2025
It is important to note that before 1 April 2025, foreigners holding valid visas can still apply to FIRB for approval to purchase established homes. Therefore, foreign persons interested in buying property in Australia should act quickly to complete their transactions before the policy takes effect.
Conclusion
The introduction of this new policy underscores the Australian government’s commitment to tightening regulation of the property market, protecting housing access for local residents, and curbing speculative practices. For foreign investors, understanding the policy details and planning ahead is crucial. For further information or legal advice, consulting a professional property lawyer is highly recommended.
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