Foreign Investors: What You Need to Know About the 2-Year Ban on Buying Australian Homes

In an effort to ease housing affordability and promote homeownership for local residents, the Australian Government has announced a two-year ban on foreign investors purchasing existing residential properties. This new measure is already making waves across the real estate market, and if you're an investor, developer, or business involved in property, this ban could have a significant impact on your plans.

So, what does this new policy mean for foreign investors, businesses, and the property market in Australia? Let’s take a deeper dive into the changes.

🏡 What Is the 2-Year Ban on Foreign Property Purchases?

Starting in 2025, the Australian Government will implement a two-year moratorium preventing non-resident foreign investors from purchasing established residential properties. The primary objectives of this policy are:

• Increased housing availability for Australian citizens and permanent residents

  
  

• Reduced competition in the housing market to ease pressure on home prices

  
  

• Encouragement for foreign investment in new property developments rather than established properties

While the aim is to alleviate housing affordability issues, the new restriction is sure to have notable consequences for foreign investors and businesses within the property sector.

🌍 Who Will Be Affected by This Ban?

The two-year ban specifically targets non-resident foreign buyers—those who do not hold Australian citizenship or permanent residency. If you are part of the following groups, you will need to adjust your investment strategies accordingly:

• Overseas investors looking to purchase existing properties in Australia

  
  

• Real estate businesses and agents relying on foreign investment

  
  

• Developers and builders marketing properties to international buyers

  
  

• Tax consultants assisting foreign nationals with their investment portfolios

  
  

However, it’s important to note that this ban does not apply to new homes or off-the-plan developments, meaning overseas buyers can still invest in these areas.

📉 Potential Impacts on the Property Market

1. Decreased Demand in Major Cities

Cities such as Sydney, Melbourne, and Brisbane—long favoured by foreign investors—could experience a temporary drop in demand for established properties. This could especially affect the high-end, luxury housing market.

2. Shift Towards New Builds and Developments

With restrictions on existing homes, foreign investment will likely shift towards new developments, stimulating the construction sector and potentially driving growth in infrastructure projects.

3. Rental Market Pressure

The reduced influx of foreign investment into established homes may place further pressure on the rental market in certain areas. This could lead to higher rental prices unless there is a rapid increase in supply.

4. Business Strategy Adjustments

Businesses in construction, development, and real estate must be proactive in adapting their marketing and funding strategies to remain compliant and competitive in the changing landscape.

📊 Tax and Compliance Considerations for Foreign Investors

For foreign investors, it’s crucial to work closely with tax professionals to navigate the shifting regulatory environment. Some key considerations include:

• Reviewing current portfolios and understanding the implications of the ban on existing properties

  
  

• Capital gains tax (CGT) implications for any assets held in Australia

  
  

• Exploring alternative investment opportunities such as new property developments

  
  

• Ensuring compliance with Foreign Investment Review Board (FIRB) requirements

If you’re involved with international investments or managing foreign clients, now is the time to review your strategies, restructure partnerships, and ensure that all future transactions comply with Australian law.

💼 How Streamlined Accountants Can Assist You

At Streamlined Accountants, we specialise in providing tailored advise for both local and international clients. We can help you navigate the complexities of tax, compliance, and investment regulations to ensure that your business stays ahead of these changes.

Our services include:

• Customised investment strategy sessions

  
  

• Tax and compliance reviews in light of the FIRB updates

  
  

• Legal structure and entity planning for foreign investors

  
  

• Ongoing support to keep you aligned with regulatory changes

📞 Let’s Plan Your Next Move

Are you concerned about the impact of this new property ban on your business or investments? Streamlined Accountants can provide you with the insights and support you need to adjust your strategy and remain compliant.

Call us today on 0451-040-656 or email us at info@streamlinedaccountants.com.au to schedule a consultation. Let’s ensure your business is ready for the future of property investment in Australia.