Australian Citizen Overseas Buying Property: When FIRB Still Applies

Introduction

An Australian citizen who lives and works abroad is not a foreign person under the Foreign Acquisitions and Takeovers Act 1975 (Cth) (FATA). For residential real estate, that means the Foreign Investment Review Board (FIRB) imposes no general obligation to seek approval. Many overseas Australians assume the exemption is absolute. In a range of circumstances, however, an Australian citizen’s overseas residency or the structure through which a purchase is made will bring a transaction squarely within FIRB’s reach.

This article examines when an Australian citizen overseas still needs to consider FIRB approval. It draws on FIRB Guidance Note 1 – Residential Real Estate, the FATA definition of a foreign person, and the fee schedules published by the Australian Taxation Office (ATO) on behalf of the Treasury. All figures are current as at the 2024–25 financial year.

The General Rule: Australian Citizens Are Not Foreign Persons

Section 4 of the FATA defines a foreign person. An individual is a foreign person if they are not ordinarily resident in Australia, unless they are an Australian citizen. Australian citizenship trumps residence. FIRB’s guidance confirms: “An Australian citizen is not a foreign person, regardless of where they live.”

This means an Australian expatriate working in London, Singapore or New York can purchase established dwellings, new dwellings, vacant land and commercial property without notifying FIRB. There is no application fee, no approval condition and no breach risk based solely on the fact they reside overseas. The exemption is unconditional for individuals acting in their own name.

FIRB expressly addresses the overseas citizen scenario in Guidance Note 1 – Residential Real Estate. Under the heading “Who needs to apply?”, it lists foreign persons and provides the citizenship carve-out. This clarity, however, can breed a false sense of security. The exemption applies to the individual, not to every transaction that individual touches.

Residence and the ‘Ordinarily Resident’ Trap for Non-Citizens

While an Australian citizen is immune from residence-based tests, a permanent resident is not. A New Zealand citizen holding a Special Category Visa, or a permanent resident who has been outside Australia for more than 200 days in the preceding 12 months, will generally be regarded as not ordinarily resident and will therefore be a foreign person for FIRB purposes. An overseas Australian who purchases jointly with a non-citizen partner who falls below the 200-day threshold needs to assess the partner’s status separately.

The 200-day rule is outlined in Treasury’s foreign person definition. It is calculated as a rolling 12‑month window, not a calendar year. A partner who leaves Australia in March and does not return until the following May will have been absent for well over 200 days, even if they spent a few weeks on Australian soil during a short visit. Each joint buyer is assessed independently. If one is a foreign person, the transaction may require FIRB approval for that person’s interest.

When an Australian Citizen Overseas Triggers FIRB: Joint Purchases with a Foreign Spouse or Partner

The most common pitfall arises when an Australian citizen buys residential real estate together with a spouse or de facto partner who is not an Australian citizen. FIRB treats the acquisition as a foreign acquisition of an interest in Australian residential property. Even though the citizen is exempt, the foreign partner is not. As a result, the whole transaction can require notice to FIRB because the foreign partner acquires an interest in Australian land.

FIRB’s residential real estate guidance states: “If you are a foreign person and you intend to acquire residential real estate jointly with an Australian citizen, you will generally need to apply for foreign investment approval.” There is a limited exception: if the property will be the couple’s principal place of residence and the Australian citizen is buying as a joint tenant with their foreign spouse, an exemption from the standard new dwelling and established dwelling restrictions may apply. But the exemption does not remove the requirement to notify FIRB; it merely simplifies the assessment. The notice must still be lodged and the fee paid.

The FIRB application fee for residential real estate acquisitions by foreign persons currently starts at $13,200 for properties valued at $1 million or less, rising to $26,400 for properties between $1 million and $2 million, and escalating further for higher value bands. The fees schedule is updated each financial year. A failure to apply before entering a contract can result in civil penalties, divestment orders and a public record of non-compliance.

Buying Through a Company or a Trust: Structure Can Displace the Citizenship Shield

An Australian citizen who holds shares in a foreign company or acts as a trustee of a discretionary trust can inadvertently push a property purchase into FIRB territory. FATA looks through the individual to the entity. If a company is incorporated outside Australia or has a substantial foreign interest, it is a foreign person. A trust is a foreign person if any trustee is a foreign person or if a substantial interest in the trust is held by a foreign person.

Consider an Australian citizen living in the United Kingdom who uses a UK-incorporated company to purchase an investment property in Sydney. The company is a foreign person regardless of the citizenship of its directors or shareholders. It must obtain FIRB approval and is confined to purchasing new dwellings or vacant land for development. It cannot buy an established dwelling unless the property meets the “near-new dwelling” exemption or is acquired for redevelopment with an obligation to increase the housing stock.

Similarly, a family trust with a foreign corporate trustee, established for asset protection, will be treated as a foreign trust. Even if the Australian citizen is the appointor and sole beneficiary, the trust must apply for FIRB clearance. The fee is calculated on the value of the property, and the usual restrictions on property type apply.

The FIRB website notes that a foreign company or trust may also be subject to ongoing conditions, including reporting obligations. Breaching those conditions can result in penalty infringement notices of up to $333,000 for individuals and higher amounts for corporations.

Property Type Matters Even for a Citizen – New Dwellings, Land and Established Homes

An Australian citizen buying in their own name does not face restrictions on property type. They may purchase an established dwelling, rent it out, leave it vacant or demolish it. However, when FIRB applies—for example, because the citizen is acquiring together with a foreign spouse or through a foreign entity—the property type suddenly determines whether approval can be granted.

Under current residential real estate policy, foreign persons:

• Cannot purchase established dwellings unless they are a temporary resident and the dwelling is their principal place of residence, or they fall within a redevelopment exemption.
• May purchase new dwellings from developers without a vacancy condition.
• May purchase vacant residential land provided they intend to construct a dwelling within four years, with evidence of progress at key milestones.

If an Australian citizen buys vacant land with a foreign spouse, the couple must satisfy FIRB that the land will be developed. The application must attach a builder’s contract, council DA approval or at least a detailed feasibility timeline. Vacant land approvals are subject to the four‑year construction condition. Failure to meet the condition can lead to a divestment order, even years after settlement.

Similarly, an Australian citizen who uses a Singaporean private company to buy an apartment off the plan must ensure the apartment is a new dwelling. The developer’s registration with FIRB under a new dwelling exemption certificate does not cover foreign buyers acquiring indirectly through a foreign entity. An individual application is required for the entity.

Exemptions That Still Apply to Overseas Australian Citizens

Even in scenarios where FIRB would otherwise apply, certain exemptions can simplify the process for Australian citizens living overseas:

• Principal place of residence for the foreign spouse – If the property will be the home of both the citizen and the foreign spouse, FIRB will normally approve the acquisition without the restrictions that apply to pure investment purchases. The approval typically does not have an ongoing vacancy condition, but the couple must genuinely occupy the property.
• New dwelling exemption certificates – Developers may hold a certificate that allows them to sell new dwellings to foreign persons without the buyer needing individual FIRB approval. If the overseas Australian citizen is buying a new apartment through a foreign spouse, and the developer has a valid certificate, the spouse may not need a separate FIRB notice. This does not cover a foreign company or trust buyer.
• Will or devolution of title – An Australian citizen inheriting property does not need FIRB approval regardless of the deceased’s citizenship status. The exemption applies from the date of death, and subsequent transfers to a foreign spouse as part of estate distribution may still need approval if the spouse is not a citizen.

FIRB Approval Process in a Mixed-Person Transaction

When an Australian citizen and a foreign partner purchase together, the FIRB application is made by the foreign person, not the citizen. The application is lodged online through the FIRB portal, which is administered by the ATO on behalf of the Treasury. The standard review period is 30 days, although the legislation allows up to 90 days. In practice, residential applications are often processed within 2–4 weeks.

The application requires:

• Identification details for all foreign persons involved.
• Property address and description.
• Contract of sale or heads of agreement.
• Declaration that the information is true and complete.

The fee is payable at lodgement. It is not refundable, even if the application is refused. FIRB suggests obtaining a pre-approval or making the contract conditional on FIRB approval to avoid fee loss.

If the foreign person already owns Australian property, the application must disclose existing interests. FIRB does not impose aggregate ownership limits on individuals, but it may scrutinise transactions if the foreign person is acquiring multiple established dwellings in a short period.

Stamp Duty and Land Tax Surcharges for Foreign Buyers

FIRB approval is separate to state and territory revenue surcharges. Every state except the Northern Territory now levies a foreign buyer surcharge on stamp duty, typically 7% or 8% of the property’s dutiable value. New South Wales applies an 8% surcharge, Victoria 8%, and Queensland 7%. These surcharges apply to foreign natural persons and to certain foreign trusts and companies, but not to Australian citizens.

When a foreign spouse acquires an interest jointly with an Australian citizen, the surcharge is applied to the foreign spouse’s portion of the property. For joint tenancies, the interest is usually taken to be 50% unless evidence supports a different split. The surcharge is calculated on the full dutiable value, not just the foreign interest, creating a disproportionate cost.

Annual land tax surcharges further burden foreign owners. In Victoria, the absentee land tax surcharge is 4% for trusts and 2% for individuals on top of standard land tax. An Australian citizen who is not a foreign person does not pay the surcharge, but if the title includes a foreign spouse, the Commissioner may assess the surcharge against the spouse’s share, again potentially based on the whole land value. Clear title structuring advice from a property lawyer is essential before settlement.

Penalties for Non-Compliance

Under the FATA, acquiring residential land without required FIRB approval carries a maximum civil penalty of the higher of $3.33 million or 10% of the consideration for the acquisition. Criminal penalties of up to $1,332,000 or 10 years’ imprisonment apply for intentional contraventions. The Treasury can also issue divestment orders, requiring the property to be sold within a set period, often resulting in losses.

Between 2015 and early 2025, the ATO has issued more than 27 divestment orders and has collected tens of millions in penalties, predominantly from foreign persons purchasing established dwellings without approval. A small number of cases involved Australian citizens who had structured purchases through foreign companies without seeking approval, believing their citizenship exempted them.

The ATO participates in data-matching programs with state land titles offices and the Department of Home Affairs. It is now routine for the ATO to cross-reference citizenship and visa data with property transfers. An overseas Australian who relies on a mistaken view of their partner’s status, or who uses a British Virgin Islands company to hold a Sydney apartment, is increasingly likely to be detected.

Practical Steps for an Overseas Australian Citizen Planning a Purchase

1. Confirm the status of every buyer – Check the partner’s permanent resident status and days in Australia before signing a contract.
2. Understand the structure – Buying in individual names is usually the path of least regulatory resistance. Using an overseas company or a discretionary trust with foreign beneficiaries will almost always require FIRB involvement.
3. Obtain a FIRB pre-approval for the foreign party – If a foreign spouse or entity is involved, apply for FIRB approval before exchanging contracts. Most conveyancers will insist on this condition.
4. Budget for the FIRB fee – The 2024–25 fee for a residential property valued under $1 million is $13,200, payable by the foreign applicant.
5. Seek state stamp duty advice – Determine whether the foreign surcharge applies and how it is calculated in the relevant state.
6. Engage an Australian-licensed conveyancer – Many Australian solicitors now offer video-conferencing services and can handle FIRB applications on behalf of an overseas client.

This guide provides general information only and does not constitute personal financial or legal advice. The application of the Foreign Acquisitions and Takeovers Act to a specific transaction can be complex and depends on individual circumstances. Always consult a licensed Australian mortgage broker and an experienced property lawyer before purchasing real estate.

Conclusion

Australian citizenship anchors a powerful exemption from FIRB oversight, even for citizens who have not set foot on Australian soil for a decade. Yet the exemption is personal and fragile. A joint purchase with a non-citizen partner, a purchase through a foreign-incorporated company and even the choice of property type can bring a transaction squarely within FIRB’s purview. The resulting application fee, foreign buyer surcharges and compliance conditions can easily exceed $100,000 on a typical Sydney or Melbourne purchase.

Overseas Australian citizens should treat the FIRB question as a threshold diligence item, not an afterthought. Two hours spent reviewing the buyer structure and checking residency status with Treasury’s guidance can prevent a risk that compounds at settlement and attracts the ATO’s scrutiny. The FIRB application portal, the state revenue offices and a qualified property lawyer are the only reliable checkpoints before signing a contract.

Information only, not personal financial advice. Consult a licensed mortgage broker.