Government Tightens Rules on Foreign Home Purchases

The Albanese Government has announced a two-year ban on foreign investors purchasing established homes in Australia. This policy, set to take effect from 1 April 2025 to 31 March 2027, aims to ease pressure on the housing market and make more properties available for Australian buyers. A review will take place before the ban ends to determine whether it should be extended further.

While the ban applies broadly, there are exceptions for investments that significantly increase housing supply or support accessibility, such as those linked to the Pacific Australia Labour Mobility (PALM) scheme. To enforce the new regulations, the government is committing $5.7 million over four years from 2025–26 to bolster the Australian Taxation Office’s (ATO) foreign investment compliance team. This will enhance screening processes and ensure foreign investment proposals align with the rules.

Beyond restricting purchases of existing homes, the government is also cracking down on land banking, where foreign investors hold onto undeveloped land to profit from rising prices rather than developing housing. To tackle this issue, $8.9 million will be allocated over four years from 2025–26, with an ongoing $1.9 million annually from 2029–30, to implement an audit program. This initiative aims to ensure that foreign-owned vacant land is developed in a timely manner to help increase housing availability.

These measures are part of the Albanese Government’s broader $32 billion Homes for Australia plan, which is focused on boosting housing supply and helping more Australians secure homes. The government has highlighted its commitment to tackling the housing crisis with proactive policies, contrasting its approach with opposition parties that have proposed cuts to housing programs.

If you'd like to talk about how this will affect your property plans, don't hesitate to contact the team at Bellcourt on 08 6141 7848