Established dwellings are closed
From April 2025 until 30 June 2029, foreign persons cannot buy established homes. New, off-the-plan and vacant land only — which narrows the field considerably. Foreign buyer rules
Home / Why Australia / What you should know
We can't only give you
the good half
Conditions here work against an overseas buyer in ways worth knowing early. Most tax outcomes are settled before contracts are exchanged, and after that they cannot be undone. We would rather you heard this from us first.
Reality check
None of this is one-sided
Please don't decide having read only the section above. There are conditions that work against an overseas buyer, and we would rather you heard them from us first.
The foreign purchaser surcharge
7–9% of the price depending on the state, on top of ordinary stamp duty. On a million-dollar property that is $70,000–$90,000, payable at purchase. Tax detail
No CGT discount
Australian residents holding more than twelve months receive a 50% discount on the assessable gain. Non-residents do not — and since July 2020 a foreign resident generally cannot claim the main residence exemption either. What remains is set out below.
Transaction costs are heavy
Acquisition alone runs past 13% of the price. This does not suit a short hold. Assume five years or more. Full cost breakdown
Currency is a separate risk
You buy in Australian dollars and the asset appreciates in Australian dollars. Converted back home the result may differ, for reasons that have nothing to do with property.
Not every city is rising
Melbourne grew 0.5% over the past twelve months. “It's Australia, so it goes up” is not a proposition that holds. The city and the property both have to be chosen.
We put the unfavourable half on this page because we have watched buyers walk away days before settlement, having only discovered it then.
If you are taxed in Korea
Australian property sits outside
Korea’s housing count
For buyers who are Korean tax residents this can matter more than the growth figures. Property held overseas is not counted in Korea’s comprehensive real estate holding tax (종합부동산세), and it does not count toward the number of dwellings used to assess multiple-home penalties on acquisition and capital gains tax.
In practice that means someone who owns one home in Korea and buys in Australia still holds one Korean dwelling for the purposes of the one-household-one-home CGT exemption and the long-term holding deduction. Buying a second property inside Korea would forfeit both.
Australia also levies no inheritance tax and no gift duty. That is not the same as no tax: Australia settles the position through capital gains tax when the property is eventually sold, and a Korean tax resident who inherits remains assessable in Korea, which taxes residents on worldwide assets.
General information only, not tax advice. Korean and Australian tax law both change frequently. Have your position confirmed by a qualified practitioner in each jurisdiction.
CGT planning
There is legitimate planning.
The loopholes are closed
Let us be clear about the starting point. Most of what people still describe as a way around capital gains tax was shut in 2020. Here is what actually remains.
What closed — July 2020
Before then, someone who had lived in an Australian home and later moved overseas could still claim the main residence exemption. Today, if you are a foreign resident at the time of the CGT event, the exemption generally does not apply at all — regardless of how long you lived there.
The so-called six-year rule survives for foreign residents only where a narrow life event — terminal illness, the death of a spouse or a child under 18, or a relationship-breakdown settlement — occurs within six years of becoming non-resident. It does not cover ordinary circumstances.
What remains
Your residency at the time of sale
Both the exemption and the discount are tested on your tax residency when you sell, not when you bought. If relocation to Australia is on your horizon, selling before or after that change produces materially different outcomes. Timing is the tax.
Whose name it is in
Where a spouse is an Australian citizen or permanent resident, how the interests are split changes the assessment. This is fixed the moment names go on the contract, so it has to be decided before purchase.
What goes into the cost base
The most reliable lever, and it applies to everyone. Stamp duty, the foreign purchaser surcharge, conveyancing, inspections and capital improvements all lift the cost base and reduce the assessable gain. People routinely lose this by not keeping receipts.
Holding period and timing
For a resident, the 50% discount requires more than twelve months. And a gain is added to your other income for that year, so realising it in a lower-income year changes the rate that applies to it.
Foreign tax credits at home
Tax paid in Australia is generally credited against the liability in your country of residence, so the same gain is not fully taxed twice. Credit limits mean a residual can remain.
Clearance before you sell
When a foreign resident sells, the buyer withholds part of the price for the ATO — 15% since 1 January 2025, with no price threshold. Obtaining a clearance certificate in advance changes your cash position at settlement. Plan the exit early.
None of these is a way of not paying. They are decisions about when, in whose name, and on what evidence the calculation is made.
And five of the six have to be settled before you buy. By the time most people consult an accountant — at sale — the answers are already fixed. That is why we bring one into the conversation before contracts.
This summarises generally published rules as at August 2026 and is not tax advice. Tax law and residency tests change frequently, and their application to your circumstances may differ entirely. Obtain confirmation from a registered tax agent or qualified accountant before acting on any of it. We accept no liability for reliance on this material.
So, now?
Whether now is your moment
depends on you
The undersupply is structural and will not resolve quickly. That much is fact. It does not follow that you should buy today.
If permanent residency is a few months away, waiting saves you the surcharge outright. If the capital has to come back out within five years, transaction costs make a loss likely. If the purchase has to fit a child's school year, that calendar outranks any view on the market.
Working out which of these applies to you is what the first conversation is for. If the answer is that this is not your moment, that is what we will tell you.
Figures on this page summarise material published as at August 2026 (Australian Bureau of Statistics, market research providers and government releases) and vary between sources and methodologies. Past movements in value and market forecasts are not a guide to future returns. This page is general information only and does not constitute investment advice. Investment decisions and their outcomes remain your own.
Where to start
Most of this is decided
before you sign
Whose name it goes in, how the interests are split, when you buy and when you sell. Much of what is on this page is fixed the moment contracts are exchanged, and unwinding it later costs about what buying and selling again would cost.
Which is why we convene the accountant before we show you property, not after. A first call will set the order of operations for your situation.