How To Buy Property In Australia As A Non Resident

If you're overseas and eyeing a place in Melbourne, you're not alone. There's something about the city's tree lined streets, laneway coffee, and the tram bell that makes the idea of putting down roots here feel, well, cosy. Buying as a non resident is entirely possible, though the pathway has a few twists. In this guide I'll walk you through what you can buy, what it costs, and the exact steps to make it happen in Victoria, with Melbourne specific tips sprinkled throughout.

Can Non Residents Buy Property in Melbourne?

Short answer: yes, but there are sharper edges than there used to be. From 1 April 2025 to 31 March 2027, foreign persons are banned from purchasing established dwellings in Australia. That includes temporary residents who previously could buy one established home to live in. Limited exceptions exist, such as approved redevelopment or specific worker housing schemes.

Practically, for most non residents that means you'll be looking at:

New or near new dwellings
Off the plan properties
Vacant residential land to build on

You'll also need FIRB approval in most cases.

What Counts as 'New' and What's Off the Table

A new or near new dwelling is one that has not been lived in for more than twelve months in total and is sold by a developer. Buying an established dwelling to simply hold as is is off the menu during the ban period, unless you fit a narrow exception such as redevelopment.

FIRB Approval and Fees: Factor This in Early

Before you sign, budget time and money for Foreign Investment Review Board approval, administered by the ATO. Fees reset each 1 July and scale with price. For 1 July 2025 to 30 June 2026, an application for a new dwelling or vacant residential land costs:

$15,100 up to $1 million
$30,300 up to $2 million
Climbing in tiers to over $1.2 million for very high values

FIRB fees for established dwellings are listed but remember the temporary ban.

Federal Vacancy Fee

There's also a federal vacancy fee if your property sits empty for 183 days or more in a vacancy year. From vacancy years starting 9 April 2024, the fee is double your application fee, which gets expensive quickly. The ATO also spells out the current enforcement stance, including stronger action on land banking. Build and use the home or rent it, and lodge your annual return on time.

Pro Tip: FIRB can also grant exemption certificates that let you shop within a price cap for a new dwelling in a particular state, which can speed things up if you want to look across multiple projects before you commit.

Victorian Property Taxes for Non Residents: The Complete Breakdown

Buying in Victoria means a second layer of taxes atop FIRB fees. Here are the big ones that hit non residents.

Stamp Duty (Land Transfer Duty)

Victoria charges duty on most purchases, with tiered rates that differ depending on whether you'll live in the property or not. The State Revenue Office has the current rates and a calculator to estimate your bill. Budget duty within 30 days of settlement.

Foreign Purchaser Additional Duty (FPAD)

If you're a foreign purchaser of residential property in Victoria, you pay an extra 8% of the dutiable value on top of regular duty. That rate has applied to contracts on or after 1 July 2019 and still applies in 2025. Importantly, FPAD is charged on your share if you hold jointly.

There is a helpful exemption if you buy a principal place of residence jointly with your Australian citizen or permanent resident spouse or a qualifying New Zealand citizen, and you meet occupancy conditions. The decision is technical, and recent cases show that owning in the foreign spouse's sole name will likely fail. Get tailored advice before you sign.

Absentee Owner Surcharge (AOS) on Land Tax

Own Victorian land as an absentee owner at 31 December and, from the 2024 land tax year, your land tax includes a 4% surcharge. This is separate from FPAD and can bite if you keep the property as a long term investment while living offshore. You must notify the SRO by 15 January if you are an absentee owner.

Vacant Residential Land Tax (VRLT) Statewide from 2025

From 1 January 2025, Victoria's VRLT applies statewide if a home is vacant for more than six months in the preceding calendar year. The rate is progressive:

1% of capital improved value in the first year of vacancy
2% the next year
3% after that

There are rules for properties under long construction or uninhabitable homes, and separate rules for undeveloped land in metropolitan Melbourne starting in 2026.

Short Stay Levy from 2025

If you plan to Airbnb your place, factor in Victoria's 7.5% short stay levy on the total booking amount for eligible stays from 1 January 2025. Hotels, motels and some primary residence arrangements are excluded, but do check the detail before you model yields.

Getting Finance as a Non Resident: What You Need to Know

Australian lenders mostly prioritise citizens and permanent residents. Some banks and specialist lenders do lend to non residents or accept foreign income, though policy swings are common, documentation can be heavy, and maximum loan to value ratios are often tighter than for locals.

Expect:

More scrutiny
Possible income shading for currency risk
A longer approval timeline

A broker who regularly places non resident loans is worth their weight in gold here.

Melbourne Tip: A 60 day settlement is common and gives your lender breathing room. If your lender or currency transfer runs slow, 30 days can feel like a sprint.

Your Melbourne Property Buying Pathway: Step by Step Guide

Step 1: Decide What You Can Buy, Then Shortlist Projects

With the established home ban in place, focus on new builds and off the plan apartments or townhouses. In Melbourne that might mean CBD and fringe precincts like:

Docklands
Southbank
Footscray
Box Hill
Preston

Where developer stock is readily available. Verify that the dwelling truly qualifies as new or near new under the ATO guidance.

Step 2: Line Up the Right Team

At minimum you'll want:

A conveyancer or property lawyer
A mortgage broker who knows non resident files

Your conveyancer will steer the process and keep you compliant with Victorian practice, including identity checks and electronic settlement in PEXA, which is now the default platform.

Verification of identity is mandatory in Victoria. Your conveyancer will follow published VOI standards issued by Land Use Victoria and the national e conveyancing council. If you are abroad, ask about acceptable remote VOI processes well before exchange.

Step 3: Get Finance Pre Approval and Plan the Cash Flows

Confirm your:

Deposit amount
Currency transfer mechanics
Whether your lender needs extra documents like tax returns, employment letters and bank statements

Consider exchange rate risk, particularly if your deposit or settlement funds will arrive from overseas. A broker can flag which lenders accept your currency and how they 'shade' income.

Step 4: Review the Section 32 Before You Fall in Love

In Victoria, a seller must provide a Section 32 vendor statement before you sign. It discloses key facts, from planning overlays to services and rates. You'll also receive the Consumer Affairs Victoria due diligence checklist with pointers for buyers. Always have a professional review the Section 32 and contract, even if the apartment looks brand new.

Step 5: Understand How Melbourne Sales Actually Work

There are two main paths:

Private Sale: You usually have a three business day cooling off period with some exceptions. Use it wisely to finalise finance and inspections.

Auction: Contracts are unconditional, there's no cooling off, and the deposit is usually 10% on the spot. While you are unlikely to buy at auction during the established home ban, these norms still apply for new builds that are auctioned.

For off the plan purchases there are extra protections and quirks, including deposit caps and sunset date rules if the plan is not registered in time.

Step 6: Run the Numbers with All the Victorian Extras

On top of the price, budget for:

Stamp duty at Victorian rates
FPAD at 8% if you're a foreign purchaser of residential property
FIRB application fees, scaled by price
PEXA and settlement charges, and your professional fees
Land tax if applicable, plus 4% absentee owner surcharge if you're offshore
VRLT if the home sits empty too long
The federal vacancy fee if you leave a FIRB approved dwelling unused for over six months
Short stay levy if you plan to Airbnb the place

Step 7: Exchange and Settlement the Melbourne Way

Contracts exchange once signed and the deposit is paid to trust. Settlement typically lands 30 to 90 days later, with 60 days the sweet spot in Melbourne. Your conveyancer will coordinate electronic settlement in PEXA, and you will complete VOI and any source of funds checks. You or your lender will also pay stamp duty around settlement.

Step 8: After You Get the Keys

Once you're on title, your obligations continue. If you're an absentee owner, notify the SRO by 15 January each year. If the place is vacant for six months or more, expect VRLT and, as a foreign owner, a federal vacancy fee as well. Keep good records and lodge returns on time.

Common Traps Non Residents Face (And How to Avoid Them)

Trying to Buy an Established Home During the 2025 27 Ban

Agents may be friendly, but the law is firm. Confirm property type before you spend on due diligence.

Underestimating FPAD

That extra 8% in Victoria is on top of duty and can change whether a deal stacks up. Use the SRO calculator and rate pages before making an offer.

Missing the Spouse Exemption

If you are eligible, structure the purchase jointly and meet the principal residence conditions; buying in the foreign spouse's sole name can torpedo the exemption.

Forgetting About VRLT and Vacancy Fees

Empty homes trigger serious recurring costs from 2025 in Victoria and federally if left idle. Plan for occupation or bona fide leasing.

Finance Timing Issues

Overseas income can extend approval. Aim for a 60 day settlement where possible.

Off the Plan Fine Print

Understand deposit caps, construction timelines and sunset clauses; keep an eye on developers' track records and owners corporation budgets.

What It Really Costs: A Realistic Melbourne Property Budget

Every purchase is different, but a sensible Melbourne budget for a non resident might include:

10% deposit at exchange or auction
Stamp duty at the relevant tier, plus 8% FPAD if you are a foreign purchaser
FIRB fees scaled to price
Conveyancing and search costs; allow for VOI, trust account handling and settlement platform fees through PEXA
Land tax and, if applicable, absentee owner surcharge from the next land tax year
Possible VRLT if you leave a home empty; the rate escalates if vacancy continues
Short stay levy if you plan to run short term accommodation

Melbourne Specific Property Buying Tips

Saturday Rhythm

Melbourne auctions cluster late morning to mid afternoon. Traffic and parking near tram corridors can be hectic, so arrive early if you want a look at the crowd and comparable bidders' behaviour.

Inner City Due Diligence

Near tram lines and major events, check owners corporation rules for short stays and pet policies, plus any façade rectification levies. Your Section 32 and contract pack will usually include owners corporation certificates.

Settlement Timing

Where possible, negotiate 60 days. It aligns neatly with lender timeframes and reduces the risk of last minute extensions.

Insurance

Arrange building and contents cover to commence at exchange or at least by settlement, per your conveyancer's advice. Consumer Affairs Victoria emphasises being prepared ahead of settlement.

Final Word: Process and Peace of Mind

Buying from overseas can feel like juggling in the dark. The key is to control what you can: choose eligible property types, secure FIRB approval early, plan your finance timeline, and let a Melbourne conveyancer obsess over your Section 32, contract conditions, and PEXA settlement so you do not have to. Along the way, keep one eye on Victorian tax quirks that add up quickly for non residents.

Ready to Take the Next Step?

If you want a calm, local hand on the wheel, Pearson Chambers Conveyancing is here to help. We'll review your Section 32 contract free of charge, talk you through FIRB timing, and map the exact duty and surcharge picture for your situation.

Call: 03 9969 2405
Email: contact@pearsonchambers.com.au