From the 1 April 2025, a new class of foreign investors (namely, temporary residents) will have to put a pause on their dreams of owning a home in Australia, with the Government announcing a temporary ban for foreign investors purchasing established dwellings.
The ban is in a bid to boost housing supply for Australian’s purchasing existing homes and is set to last until 31 March 2027.
What is an established dwelling?
An “established dwelling” is a dwelling on residential land that is not a new dwelling (but excludes commercial residential premises, such as hotels and caravan parks).
Who will be affected by the ban?
Under the current Foreign Investment Review Board regime, foreign purchasers are already generally prohibited from purchasing established dwellings in Australia. However, the regime exempts temporary residents purchasing an established dwelling as their principal place of residence.
It also exempts foreign-owned companies purchasing an established dwelling for redevelopment.
The new ban will remove these exemptions so that temporary residents and foreign-owned companies will no longer be able to purchase established dwellings (unless a new exemption applies).
Limited exemptions have been announced including if the investment will significantly increase housing supply, or support the availability of housing supply or foreign purchasers connected to the Pacific Australia Labour Mobility (PALM) scheme.
After the introduction of the foreign purchaser surcharge, vacant residential land tax and absentee owner surcharge at a State level and now the further narrowing of foreign investment rights at a Federal level, it’s safe to say that foreign investment in Australia, and certainly in Victoria, is well and truly kaputt!
