Foreign buyers in Victoria: FIRB, the established-dwelling ban, and extra duty

If you are not an Australian citizen, or you are buying with someone who is not, two questions sit on top of every property decision: are you allowed to buy this particular home, and what will it cost you over and above the price? Those questions are answered by two completely separate systems, a federal one and a Victorian one, and confusing them is where a lot of expensive mistakes begin. This is general information, not migration or legal advice, and foreign investment rules are an area where getting your own advice early genuinely matters.

Two separate rulebooks

The rules that apply to a foreign buyer come from two different governments doing two different jobs:

• The federal rules decide whether you can buy. Foreign investment in Australian residential property is regulated nationally through the Foreign Investment Review Board (FIRB) framework, administered with the Australian Taxation Office. This is where the approval requirement and the current ban on established dwellings live.
• The Victorian rules decide what it costs. On top of ordinary land transfer (stamp) duty, Victoria charges foreign purchasers an extra slice of duty, and may charge an ongoing land tax surcharge. This is state revenue, set by the State Revenue Office (SRO).

You have to clear both. Being under the federal threshold does not remove the Victorian surcharge, and paying the Victorian surcharge does not satisfy the federal approval rules.

Who counts as a "foreign person"?

The federal framework and the Victorian framework each have their own definition, and they are not identical, which is one more reason to confirm your own status rather than assume it. Broadly, the federal rules treat non-citizens who are not permanent residents, foreign-owned companies, and certain trusts as foreign persons. Permanent residents and New Zealand citizens are generally treated differently from temporary visa holders. Because the definitions differ between the two systems and turn on your exact visa and ownership structure, this is a status question to verify with FIRB guidance and your adviser, not to eyeball.

The ban on established dwellings

This is the biggest change for foreign buyers in recent years. From 1 April 2025, foreign persons, including temporary residents and foreign-owned companies, are temporarily banned from buying established dwellings in Australia unless a limited exception applies. The ban was originally set to run for two years to 31 March 2027, and was then extended in the 2026-27 Federal Budget to 30 June 2029.

An "established dwelling" means a home that already exists and has been able to be occupied. The limited exceptions are narrow and are aimed at investment that adds to housing supply, such as certain redevelopments and build-to-rent projects, rather than a temporary resident buying an existing house to live in. Permanent residents and New Zealand citizens are generally not caught by the ban. Because the exceptions are specific and the definition of an established dwelling has edges, whether a particular purchase is allowed is a FIRB question to resolve before signing.

Can a foreign person still buy a home in Australia?

Yes, but generally in new housing rather than existing housing. The established-dwelling ban is aimed at existing homes; foreign investment is instead directed toward property that adds to supply, which broadly means new dwellings and vacant residential land bought to be developed. Buying off the plan or a newly built dwelling is the usual path, and vacant land generally comes with a condition that you actually build within a set time rather than land-bank it.

Two things still apply even where a purchase is permitted. First, a foreign person generally needs FIRB approval before buying, which means an application and an application fee, and buying without required approval carries serious penalties. Second, the Victorian surcharges below apply regardless of whether the federal approval was straightforward.

What extra does it cost in Victoria?

The headline extra cost is foreign purchaser additional duty. For contracts entered into on or after 1 July 2019, Victoria charges foreign purchasers of residential property an additional 8 per cent of the property's dutiable value, on top of the normal land transfer duty. (The rate was 7 per cent from 1 July 2016 and 3 per cent from 1 July 2015 before that, so older commentary may quote a lower figure.)

To make that concrete: on an $800,000 home, the foreign purchaser additional duty alone is 8 per cent of $800,000, which is $64,000, and that sits on top of the standard duty every buyer pays. It is a large enough number that it is a cost of the purchase itself rather than a line item that first appears at settlement. Our Victorian stamp duty guide walks through the standard duty that this surcharge is added to.

Are there ongoing costs too?

Yes. Beyond the one-off duty at purchase, Victoria also levies an annual absentee owner surcharge on land tax for owners who are absentee owners, which can include some foreign owners. It is charged each year on top of ordinary land tax, so it is an ongoing holding cost rather than a one-time charge. The rate and the precise definition of an absentee owner are set by the SRO and are worth confirming directly, because whether it applies depends on your residency and how the property is used.

What if one buyer is Australian and one is foreign?

Mixed-status couples and co-buyers are common, and the rules can turn on the details: who is on title, in what shares, and whether the home is your shared principal place of residence. Both the federal framework and the Victorian duty rules contain specific provisions and exemptions for spouses and partners in some circumstances, and these change over time. Rather than guess how a half-share or a spouse exemption would be treated, this is exactly the situation to put in front of a conveyancer and, where visa status is involved, a migration or tax adviser, before you sign anything.

None of this makes buying as a foreign person impossible; plenty of new dwellings are bought by foreign investors every year within the rules. It just means the order of operations matters: a buyer's status comes first, then whether the property is one a foreign person is permitted to buy, then any FIRB approval, with the Victorian surcharges accounted for from the outset.

Sources

• Foreign Investment in Australia (foreigninvestment.gov.au), "Changes to foreign purchases of established dwellings": the ban on foreign persons (including temporary residents and foreign-owned companies) purchasing established dwellings from 1 April 2025, subject to limited exceptions. https://foreigninvestment.gov.au/news-and-reports/news/changes-foreign-purchases-established-dwellings
• Australian Taxation Office, "Foreign investment: extending the ban on foreign purchases of established dwellings": the extension of the temporary ban, originally to 31 March 2027, through to 30 June 2029 as announced in the 2026-27 Federal Budget. https://www.ato.gov.au/about-ato/new-legislation/in-detail/international/banning-foreign-purchases-of-established-dwellings
• State Revenue Office Victoria, "Foreign purchaser additional duty (current rates)": the 8 per cent additional duty for contracts entered into on or after 1 July 2019 (7 per cent from 1 July 2016; 3 per cent from 1 July 2015). https://www.sro.vic.gov.au/about-us/rates-and-statistics/current-rates/foreign-purchaser-additional-duty-current-rates
• State Revenue Office Victoria, "Absentee owner surcharge": the annual land tax surcharge that can apply to absentee owners, including the current rate and the definition of an absentee owner. https://www.sro.vic.gov.au/absentee-owner-surcharge

Sources verified 18 August 2026. Foreign investment rules, the ban's end date, and duty and surcharge rates change with legislation and budgets; foreign-buyer status and eligibility must be confirmed with FIRB, the State Revenue Office, and your own adviser before relying on anything here.