Foreign Purchaser Additional Duty for Melbourne Buyers

By Pearson Chambers Conveyancing.
Published 29th April 2026

We get asked this all the time by Melbourne couples where one partner is Australian and the other is on a temporary partner visa, student visa or work visa. It usually comes up after a Saturday inspection, when the numbers look tight and one extra duty charge could change the whole plan.

The short answer: Foreign Purchaser Additional Duty (FPAD) is an extra 8% Victorian duty on residential property acquired by a foreign purchaser, charged on top of standard land transfer duty. It generally applies to the foreign buyer's share and is worked out before most duty concessions are applied. From 26 November 2025, a foreign spouse or domestic partner may be exempt when buying a home jointly with an Australian citizen, Australian permanent resident or qualifying New Zealand citizen, if the residence rules are met.

Who counts as a foreign purchaser in Victoria?

You are usually a foreign purchaser if you are not an Australian citizen, not an Australian permanent resident and not a qualifying New Zealand citizen. The State Revenue Office looks at each buyer separately, so a couple can have one foreign purchaser and one non-foreign purchaser on the same contract.

For an individual buyer, the key questions are:

Are you an Australian citizen?
Do you hold a permanent visa?
If you are a New Zealand citizen, do you ordinarily reside in Australia for the required six-month period around settlement?

If the answer to all three is no, FPAD may apply.

Temporary visas are where buyers often get caught. A temporary partner visa, student visa, working holiday visa or temporary skilled work visa does not usually make you a permanent resident for FPAD. A bridging visa can also be risky, because the SRO looks at the legal visa position, not just whether you live and work in Melbourne.

The New Zealand citizen rule changed for settlements on or after 26 November 2025. The focus is now on whether the New Zealand citizen ordinarily resides in Australia for a continuous period of at least six months, within the required window around settlement.

How is FPAD calculated on a joint purchase?

FPAD is usually calculated on the greater of the price paid or market value, then applied to the foreign purchaser's share. If only one buyer is foreign, the extra duty is usually limited to that buyer's ownership interest.

Take a $700,000 townhouse in Brunswick bought by two partners in equal shares. One partner is an Australian citizen. The other is on a temporary partner visa and does not qualify for an exemption. The foreign partner's share is $350,000, so FPAD at 8% would be $28,000. That sits on top of ordinary land transfer duty.

The trap is timing and order. FPAD is assessed before concessions reduce ordinary duty. So even where a couple is looking at the first home buyer duty exemption, you should still check whether FPAD applies to the foreign partner's share.

If both buyers are foreign purchasers, FPAD may apply to both shares. If ownership shares are being set unevenly, don't treat the percentage split as a shortcut. The contract, transfer, loan approval, source of funds and intended occupation should all make sense together.

Can a foreign spouse avoid FPAD when buying with an Australian partner?

Yes, from 26 November 2025, a foreign spouse or domestic partner may avoid FPAD when buying a home jointly with a qualifying Australian or New Zealand partner. The exemption is aimed at couples buying their principal place of residence together, not investment purchases or transfers into only one person's name.

In broad terms, the exemption can apply where:

the foreign purchaser buys jointly with their spouse or domestic partner
the other partner is an Australian citizen, Australian permanent resident or qualifying New Zealand citizen
the property is intended to be the foreign purchaser's principal place of residence
the foreign purchaser lives in the home for a continuous 12 months, starting within 12 months of becoming entitled to possession
the transfer is to both partners, not just the foreign partner.

For Melbourne buyers, that last point matters. If the contract and transfer are in one name because the lender found it easier, the exemption may be lost. In our practice, we've seen this risk come up when one partner's income drives the loan approval and the agent prepares the contract quickly before anyone checks the duty position.

Keep practical records for proving principal place of residence, such as utilities, licence details, electoral enrolment where relevant, moving records and mail. If the residence requirement later fails, ask for advice quickly because notification duties and reassessment can follow.

What about the federal FIRB ban on established homes?

FPAD is a Victorian duty rule, while FIRB is a federal foreign investment rule. FPAD affects how much duty you pay. FIRB affects whether a foreign person can buy the property at all.

From 1 April 2025 to 31 March 2027, foreign persons, including temporary residents, are generally banned from buying established dwellings in Australia unless an exception applies. New and near-new homes, off-the-plan apartments and vacant residential land can still be open to foreign buyers, usually with ATO approval and the right application pathway.

For a mixed-status couple looking at an established terrace in Carlton or a villa unit in Bentleigh, the spouse exception under the federal rules may be available only if the purchase is as joint tenants with an Australian citizen, Australian permanent resident or eligible New Zealand citizen spouse. That is separate from the Victorian FPAD spouse exemption, which has its own residence test. Our guide to buying property in Australia as a non-resident gives the broader buying pathway.

How does FPAD show up in settlement?

FPAD is usually calculated and paid through the Victorian duties process at settlement. Your conveyancer uses the Digital Duties Form and Duties Online to record each buyer's status, apply any available exemption and calculate total duty.

You won't usually see FPAD as a separate bill from the SRO. It is part of the total duty figure that needs to be ready for settlement, alongside registration fees, PEXA adjustments and lender funds. If you want to understand the ordinary duty side first, our guide to how standard land transfer duty is calculated is a useful starting point.

Your conveyancer may ask for passports, visa grant notices, citizenship evidence, permanent residency records or proof of ordinary residence for a New Zealand citizen. These questions can feel personal, but they are needed because a wrong answer on duty can lead to reassessment.

If the SRO assesses FPAD and you believe it is wrong, an objection may be available. The usual deadline is 60 days after receiving the assessment or reassessment, so don't leave it sitting in your inbox while you wait for settlement stress to settle down.

What mistakes should Melbourne buyers avoid?

The biggest mistake is signing before checking visa status and ownership structure. Once the contract is signed, fixing the duty position can be hard, and sometimes impossible without fresh tax consequences.

Watch for these traps:

assuming a temporary partner visa is the same as permanent residency
putting the contract in one name when the spouse exemption needs both names
choosing tenants in common for a federal spouse exception that may need joint tenants
relying on a future visa grant after the contract date
forgetting that first home buyer relief does not always remove FPAD
treating an off-the-plan purchase as duty-free for foreign purchaser purposes.

A calm review before signing is much cheaper than trying to unwind a mistake later. This is especially true at auction, where Melbourne buyers often have no cooling-off period and the contract becomes unconditional on the day.

What does a conveyancer do on an FPAD file?

A conveyancer checks each buyer's status, reviews the contract structure and works out whether any FPAD exemption is available. They also check how the transfer will be lodged, because the names and ownership method on the transfer can make or break the result.

On a mixed-status purchase, your conveyancer should usually:

review visa, citizenship and residency evidence early
calculate ordinary duty and FPAD separately
check whether the spouse or partner exemption can apply
confirm the contract and transfer match the intended ownership structure
flag any FIRB issue before the buyer commits
keep records for the principal residence requirement
explain what to do if the SRO later raises a query.

For many buyers, the FPAD answer is not just legal housekeeping. It is the difference between a comfortable settlement and a nasty shortfall.

Frequently asked questions

What is Foreign Purchaser Additional Duty in Victoria?

Foreign Purchaser Additional Duty is an extra 8% duty charged on Victorian residential property acquired by a foreign purchaser. It applies on top of standard land transfer duty and is usually calculated on the foreign purchaser's share before most concessions reduce ordinary duty.

Do permanent residents pay Foreign Purchaser Additional Duty in Victoria?

No. A person who holds an Australian permanent visa is generally not treated as a foreign purchaser for FPAD. The surcharge is mainly aimed at buyers who are not Australian citizens, not permanent residents and not qualifying New Zealand citizens.

If my partner is Australian and I'm on a temporary visa, do we pay Foreign Purchaser Additional Duty?

Possibly. If you are on a temporary visa, FPAD may apply to your share unless an exemption is available. From 26 November 2025, a spouse or domestic partner exemption may apply where you buy the home jointly with an Australian citizen, permanent resident or qualifying New Zealand citizen and meet the principal residence rules.

Can I claim a refund on Foreign Purchaser Additional Duty?

A refund or reassessment may be available if FPAD was assessed in error or an available exemption was missed. You usually need to object within 60 days of receiving the assessment or reassessment, and you should attach clear documents showing why the duty should change.

Does Foreign Purchaser Additional Duty apply to off-the-plan apartments?

Yes. FPAD can apply to an off-the-plan apartment if the buyer is a foreign purchaser and no exemption applies. The off-the-plan duty concession may reduce ordinary duty, but FPAD is assessed under its own rules and must be checked separately.

How does the federal FIRB ban on established dwellings interact with FPAD?

FIRB is about permission to buy, while FPAD is about Victorian duty payable on the purchase. From 1 April 2025 to 31 March 2027, foreign persons are generally banned from buying established dwellings unless an exception applies. A buyer may need to satisfy both the federal FIRB rules and the Victorian duty rules.

What if I become a permanent resident after I sign the contract but before settlement?

Visa timing can be decisive. The SRO may look at the buyer's status at the contract or acquisition time, so a permanent residency grant after signing may not fix the FPAD issue for that purchase. Get advice before signing if your visa grant is close.

About the Pearson Chambers Conveyancing team

Pearson Chambers Conveyancing is a Melbourne-focused conveyancing team helping first home buyers, couples and investors move through Victorian property contracts with less stress. We handle Section 32 reviews, contract checks and settlement files across the CBD, inner suburbs and wider Melbourne market. Foreign purchaser duty questions are part of what our team checks day to day when a buyer's visa, citizenship or ownership structure may affect settlement costs.

Sources we consulted

Talk to Pearson Chambers before you sign

If one partner is Australian and the other is on a temporary visa, or if you are a New Zealand citizen working out whether the residence test applies, speak with us before you sign. We can review the Section 32, check the contract structure, flag FPAD risk and help you understand whether a spouse or partner exemption may be available.

We offer a complimentary Section 32 contract review for Melbourne buyers.

Email: contact@pearsonchambers.com.au

General information only, current as at the date of publication. Victorian conveyancing rules and legislation change frequently. Please contact the Pearson Chambers Conveyancing team for advice on your specific contract.