Ahead of the upcoming Federal election, the Government has announced that it will ban foreign purchases of established dwellings from 1 April 2025 until 31 March 2027 in an effort to ease pressure on the housing market.

At this stage this is a temporary ban, however there may be a review and this could be extended beyond this time.

From April 2025 foreign investors- inclusive of temporary residents and foreign-owned companies will no longer be able to purchase an established dwelling in Australia while the ban is in place unless an exception applies.

Limited exceptions include investments that – “significantly increase housing supply or support the availability of housing supply”, and for the Pacific Australia Labour Mobility (PALM) scheme.

The ban aims to free up homes that would otherwise have been bought by foreign investors.

The ATO’s Foreign Investment Compliance team has been bolstered to enhance screening of the ban.

In an effort to free up land and to build homes more quickly, the Government will also be cracking down on land banking by foreign investors. Foreign investors are subject to development conditions when they acquire vacant land to ensure that it is put to  “productive use within reasonable timeframes”. The Labor government is providing the ATO  and Treasury $8.9 mil over 4 years to implement an audit program and enhance their compliance approach to target land banking. 

The initiatives form part of the current Government’s $1.2 million Homes for Australia plan and should free up around 1800 homes annually.