Buying Residential Property in Australia as a Foreign Buyer? Read This Before You Sign
You have found the property you want to buy. The price works, the location is right, and you are ready to sign the contract.
But if you are a foreign buyer, there is another question to answer first: are you permitted to buy this property, and have you obtained the approval required to proceed?
Australia's foreign investment rules can affect the type of residential property you can purchase, the ownership structure you use and when you can enter into a contract.
One issue deserves particular attention: the FIRB special condition.
A clause stating that a contract is subject to FIRB approval may sound reassuring. However, the wording of the condition and when approval must be obtained can make a material difference.
1. Not every residential property is treated the same way
Australia's foreign investment rules distinguish between established dwellings, new dwellings and vacant residential land.
Established homes
A temporary restriction generally prohibits foreign persons from purchasing established dwellings from 1 April 2025 to 30 June 2029, subject to limited exceptions.
This means that obtaining FIRB approval is not necessarily enough. A buyer must first establish whether the proposed acquisition is permitted under the applicable rules.
New or near-new dwellings
Foreign investors may be able to purchase new or near-new residential dwellings, subject to the applicable approval requirements and exemptions.
For off-the-plan apartments, ask the developer whether an existing exemption certificate covers the proposed purchase. Do not assume that a development marketed to foreign buyers automatically means your particular transaction is covered.
Vacant residential land
Foreign investors may be able to purchase vacant land for residential development, subject to approval and any applicable conditions. These may include requirements to complete construction within a specified period and restrictions on disposing of the land before construction is complete.
The first step is to identify the property category and determine whether the proposed acquisition is permitted.
2. The FIRB special condition: don't assume it protects you
A purchaser may ask for a special condition stating that the contract is subject to FIRB approval.
However, a FIRB special condition is not a substitute for obtaining approval at the legally required time.
For residential property, a foreign person generally needs to obtain the required approval or an applicable exemption certificate before entering into the purchase contract. Limited exceptions may apply, including certain circumstances involving exemption certificates, but these should be assessed against the current requirements rather than assumed.
If a FIRB-related special condition is proposed, consider the following.
What approval is actually required?
The condition should reflect the relevant approval or exemption applicable to the buyer and the property. Generic references to FIRB approval may not adequately address the transaction.
What happens if approval is delayed or refused?
The contract should clearly address the relevant deadline, any extension mechanism and the parties' rights if approval is not obtained. The consequences for termination and the deposit should also be considered.
What must the purchaser do?
The condition may impose obligations to lodge an application, provide information or take other steps within specified timeframes. These obligations should be understood before the contract is signed.
Does the condition work with the rest of the contract?
The FIRB condition should be reviewed alongside the deposit, settlement, notice and default provisions. A condition that appears protective in isolation may create uncertainty when read with the rest of the contract.
The critical point is that the purchaser should not rely on a generic special condition to resolve an approval issue after signing.
3. Buying with an Australian spouse? Check the ownership structure
Certain exemptions may apply where a foreign person purchases residential property jointly with an Australian citizen or permanent resident spouse.
However, eligibility depends on the specific exemption requirements and proposed ownership structure.
For example, an exemption may be available for a qualifying purchase as joint tenants but not necessarily for a purchase as tenants in common or through a company or trust.
If you intend to rely on an exemption, confirm that the proposed structure satisfies the applicable requirements before committing to the purchase.
4. What should you check before signing?
Before entering into a residential property contract, a foreign buyer should establish:
Whether they are a foreign person for the purposes of the foreign investment rules.
Whether the property is an established dwelling, a new dwelling or vacant residential land.
Whether the proposed acquisition is permitted under the current restrictions.
Whether an approval or exemption certificate is required and, if so, whether it has been obtained.
Whether an existing developer exemption certificate covers the particular purchase.
Whether the contract's special conditions, deadlines and deposit provisions appropriately address the transaction.
These checks should take place before signing, not simply when the conveyancing process begins.
5. Approval is not necessarily the end of the process
Foreign investment obligations may continue after completion.
Depending on the circumstances, buyers may need to register their interest on the Register of Foreign Ownership of Australian Assets, comply with approval conditions and consider whether a vacancy fee or other reporting obligations apply.
These requirements should form part of the buyer's assessment of the ongoing responsibilities and costs of property ownership.
Before you sign, get the position clear
Foreign investment rules can affect whether you can buy a property, how you structure the acquisition and the contractual protections available to you.
At Alteris Legal, we assist clients with property transactions and the legal issues that need to be considered before a purchase proceeds.
If you are a foreign buyer considering residential property in Australia, obtain advice on your eligibility, approval requirements and proposed contract terms before signing.
This article provides general information only and is not legal or investment advice. Foreign investment requirements, exemptions and conditions depend on the buyer's circumstances and the proposed acquisition. The applicable legislation and current government guidance should be checked before proceeding.
Date published: 30 October 2026
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