Check whether the purchase is allowed before calculating whether you can afford it. Foreign-investment rules and state tax rules are separate.
- 1 · Permission
- Can this buyer acquire this property?
- 2 · Buying costs
- Duty, possible surcharges and application fees
- 3 · Ongoing obligations
- Reporting, land tax and any vacancy obligations
“Foreign person” has legal definitions. A visa label or tax-residency answer alone may not resolve every test.
Existing and new homes are treated differently
An established dwelling is generally an existing home. The current federal policy generally prohibits foreign investors from buying established dwellings, with limited exceptions. New homes and vacant land have different approval and development rules.
Keep federal and state costs separate
A federal application fee is not stamp duty. A state or territory may impose additional foreign-purchaser duty or land-tax surcharges under its own definitions and exemptions. Do not apply one state’s percentage to the whole country.
Check before committing
Use the current Treasury and ATO guidance for the intended buyer, ownership structure and property. Confirm approval requirements before entering a binding purchase. Keep the approval conditions and check ongoing reporting and vacancy requirements.
Identify the buyer before the property budget
Create a short worksheet naming the proposed buyer and ownership structure, citizenship or residency facts, the state, property type and intended acquisition date. Federal foreign-investment rules and state revenue rules can ask different questions about the same buyer. Someone being an Australian tax resident does not, by itself, answer every foreign-person test. The purpose of the worksheet is to take the same facts to each official source, rather than selecting whichever definition appears most favourable. Keep the date and link for every conclusion.
Do not confuse affordability with permission
Imagine two buyers who each have a $200,000 deposit for the same existing home. Their bank balances are equal, but their legal ability to acquire that home may differ because their status or the applicable exceptions differ. A loan pre-approval, an agent’s advertisement and a willingness to pay extra tax do not replace the foreign-investment check. Establish the permitted purchase pathway and any necessary approval before making an unconditional commitment. Use the current restriction period shown in the rule note, not an older saved article.
Prepare three separate cost lists
Keep acquisition costs, ongoing ownership costs and borrowing costs apart. The first list may include an applicable federal application fee, state transfer duty, any purchaser surcharge and professional fees. The second may include ordinary property costs and any applicable land-tax or vacancy obligations. The third covers the loan and its fees. Do not insert a nationwide foreign-buyer percentage: the relevant definitions, exemptions and charges need their own checks. An approval application fee also should not be mistaken for a promise that approval will be granted.
Keep a calendar after an approved purchase
Retain the approval and its conditions with the property records. Make a list of required notifications, any development or use conditions and the evidence needed for each. If someone will manage the property for you, agree who will keep occupancy and letting records and who will watch deadlines. Check official guidance again before changing the ownership structure or use of the property. This guide supplies the order of questions; it cannot determine a purchaser’s legal status or replace approval for a particular transaction.
Does paying an extra foreign-buyer tax give permission to buy a prohibited property?
Sources & update record
- Treasury: residential land rules ↗
- Treasury: May 2026 foreign investment policy ↗
- Revenue NSW: duty and purchaser surcharge ↗
Expanded with original worked examples, practical checks and common mistakes. Current rule notes remain separate from illustrative arithmetic.
Published 18 Sept 2026 · Updated 18 Sept 2026. These dates do not guarantee rules are unchanged.
Published by Howloop. AI assists preparation. This lesson has not been reviewed by a licensed financial adviser. How we check our content →