Foreign investor framework gets tightened

The federal government has announced plans to ban foreign investors from buying established homes and to crack down on illegal land banking, in an effort to cool demand and increase supply.

Foreign investors need to apply for approval before purchasing residential real estate in Australia. Under the current rules, they’re generally restricted to buying new properties although they are allowed to buy established properties under certain circumstances. Under the new rules, they will be banned from buying established properties between 1 April 2025 and 31 March 2027; a review will then be conducted to decide whether to continue the ban.

The government will also take action against foreign investors who buy vacant land, sit on it and then sell it for a profit, rather than following the regulations that require them to put the land to productive use within reasonable timeframes. To enforce the policy, the government will provide funding to the Australian Taxation Office to do more auditing and compliance work with foreign investors.

“This is all about easing pressure on our housing market at the same time as we build more homes,” Housing Minister Clare O’Neil said.

“These initiatives are a small but important part of our already big and broad housing agenda which is focused on boosting supply and helping more people into homes.”