Australia FIRB: Can Foreign Buyers Buy Established Homes?

Since 1 April 2025, foreign persons have been generally banned from purchasing established dwellings in Australia, under the Australia FIRB rules. The ban applies until 31 March 2027, and the Government has already flagged that restrictions on foreign acquisition of established dwellings are likely to continue well beyond that date.

For most foreign investors, the practical effect of the ban is straightforward: established dwellings are off the table. New dwellings and vacant land remain accessible. The established housing stock, by and large, does not.

But the ban is not absolute, and its exceptions are more nuanced than they are often presented. The one that receives the most attention is the redevelopment exception under the FIRB framework — the pathway for foreign persons seeking to demolish established dwellings and significantly increase housing supply, requiring at least 20 additional dwellings. That exception is well understood.

Less discussed, and in some respects more significant for sophisticated developers and institutional investors, is the exception for acquisitions of established dwellings that support the availability of housing on a commercial scale. This article explains how that exception works and what it takes to qualify. In Part 2 of this series: Applying for the FIRB Commercial Scale Exception: What a Complex Strata Acquisition Taught Us, we walk through how the exception played out in practice on a large, complex strata acquisition, including the fee implications, the application process, and the conditions Treasury is likely to impose.

1. The Established Dwelling Ban: The Starting Point

The ban on foreign persons purchasing established dwellings in Australia operates as a general policy position under the foreign investment framework. It is not a hard legislative prohibition in the sense that no approval can ever be granted — rather, it is the Government’s stated policy, and applications that do not fall within a recognised exception will not be approved.

An established dwelling is any dwelling that has previously been sold as a dwelling or previously occupied. This distinguishes established dwellings from new dwellings (never previously sold or occupied) and near-new dwellings (previously sold by the developer but the transaction failed to settle and not occupied for more than 12 months in total).

The significance of the classification is considerable. For new and near-new dwellings, foreign persons can generally obtain approval without restriction. For established dwellings, the ban applies by default, and an exception must be positively established.

Applications involving established dwellings are assessed by Treasury directly — not by the ATO, which handles standard residential land applications. This distinction matters not only procedurally but also substantively: Treasury applies a more discretionary and case-by-case assessment to established dwelling applications, particularly those under Section G.

2. Section G: The Commercial Scale Exception

The FIRB Framework provides that established dwelling acquisition proposals that support the availability of housing on a commercial scale will be considered on a case-by-case basis.

The Guidance Note expressly identifies the following as examples of acquisitions that may qualify (without limiting the scope of the exception):

Existing Build to Rent developments where the development will continue to be operated as Build to Rent;
Retirement villages;
Assisted living or aged care facilities; and
Student accommodation.

The common thread across these examples is that the dwellings in question are being used as part of an ongoing commercial housing operation — not as individually occupied private residences. The foreign investor is, in effect, acquiring an interest in a housing business rather than a collection of homes.

This is conceptually distinct from the Section F redevelopment exception, which is forward-looking: approval is granted on the basis that the acquired dwellings will be demolished and replaced with significantly more housing. Under Section G, there is no requirement to increase housing supply. The focus is on the nature and scale of the existing housing use, and whether the acquisition will support its continuation at a commercial scale.

What 'commercial scale' means in practice

The Guidance Note does not define ‘commercial scale’ with precision, and that is deliberate. The assessment is inherently fact specific. What Treasury is looking for is evidence that the acquisition involves housing that is being operated as a substantive commercial undertaking — not a single dwelling, or a small portfolio of individually managed tenancies, but a meaningful operation with the character of a housing business.

Relevant considerations are likely to include the number of dwellings involved, the nature of the management arrangements, whether the housing is available to third parties on an institutional or commercial basis, and whether the acquisition is structured as an investment in a going concern rather than a conventional property purchase.

Brightstone Legal recently acted for a foreign-controlled developer in a large-scale urban renewal acquisition, involving more than 90 individual property titles across multiple strata schemes with a combined value exceeding $300 million. The acquisition fell squarely within this framework: a large-scale strata acquisition forming part of an urban renewal program with a substantial commercial character. The FIRB application for that transaction was structured around the commercial scale exception, demonstrating that the transaction supported the availability of housing supply at a scale that justified the commercial scale characterisation.

That transaction, and the practical lessons it offers for strata acquisitions, fee planning, the application process, and the conditions Treasury typically imposes, is the subject of Part 2 of this series: Applying for the FIRB Commercial Scale Exception: What a Complex Strata Acquisition Taught Us.

Disclaimer: This article draws on Brightstone Legal’s experience advising on complex FIRB matters and is intended for general informational purposes only. Details of specific client transactions have been anonymised to preserve confidentiality. This article does not constitute legal advice. FIRB rules are complex and fact specific. For advice tailored to your circumstances, please contact our property lawyers at Brightstone Legal.

Sources: Foreign Acquisitions and Takeovers Act 1975 (Cth); FIRB Guidance Note 6 — Residential Land (Version 4, 12 December 2025); FIRB Guidance Note 10 — Fees (Version 9, 12 December 2025); Foreign Acquisitions and Takeovers Fees Imposition Regulations 2020.