Under the plan, set to commence on April 1, 2025, foreign investors, including temporary residents and international students, will be prevented from buying established dwellings until March 31, 2027.
The policy maintains exemptions for new dwelling purchases and includes special provisions for Pacific visa scheme workers.
Housing Minister Clare O’Neil said the government is committed to increasing homeownership among young Australians.
“This isn’t a silver bullet because there is no silver bullet,” Minister O’Neil said.
“But this is an important piece of Labor’s absolutely massive housing agenda.”
Recent data shows foreign investors accounted for just 5,360 residential real estate purchases in 2022/23, with only one-third being existing dwellings.
This relatively low volume has prompted scepticism about the policy’s effectiveness in addressing housing affordability concerns.
The Property Council’s executive for policy and advocacy, Matthew Kandelaars, supported the exemptions for new builds while highlighting the importance of foreign investment.
“Australia has relied on global investment – using other peoples’ money to help build and shape our cities for the last three-quarters of a century, and we shouldn’t stop now,” he told the Guardian.
The government is also implementing measures to prevent land banking by foreign investors, requiring them to develop vacant land within reasonable timeframes.
To support these initiatives, the government will provide additional funding to the Australian Taxation Office and Treasury for enhanced screening and compliance measures.
“I really don’t care about the politics of this,” Minister O’Neil said.
“Everything we do on housing is about getting more Australians into their own homes, and this change will play a part in that.”
The government will invest $1.4 million annually in enforcement through the Australian Taxation Office, with an additional $2.2 million per year until 2029/30 allocated for increased auditing and compliance targeting of foreign investor land banking.
“This change will play a part in getting more Australians into their own homes,” Minister O’Neil said.
