21340 – Foreign Investment Policy

Foreign Investment Policy (21340) records the rules that apply when a foreign person buys residential property in Australia. It covers the Commonwealth’s foreign investment application fees, its vacancy fee and its rules on established dwellings, and each state’s and territory’s surcharges on transfer duty and land tax. Every setting is recorded as it stood at the end of each quarter from March 2011, and every change is dated to the law or policy instrument that made it.

What it does not measure. It does not measure how much foreign investment takes place, how many foreign purchases are approved, or how much residential property foreign persons own. Approval counts are not completed purchases and carry repeated breaks in their definitions, and the national register of foreign ownership has too short a history to support a time series. The node reads the rules, not the activity they govern.

The node’s headline figure is the additional cost, set by government, that a foreign person pays to buy a new dwelling priced at $1,000,000, expressed as a share of the price. It adds two amounts: the state or territory surcharge on transfer duty, and the Commonwealth foreign investment application fee. One figure is published for each state and territory. No figure combines them.

Why a new dwelling. Since 1 April 2025, foreign persons have been barred from buying established dwellings, with narrow exceptions, so the cost of an established purchase does not apply to most foreign buyers. New dwellings remain open to foreign purchase.

Why land tax is not added. Land-tax surcharges are charged every year on the value of the land, so their cost depends on how much of the price is land and how long the property is held. Adding them would require an estimate of both. They are reported alongside the headline as annual rates.

Fees are indexed each 1 July to the Consumer Price Index, rounded down to the nearest $100, and cannot fall. The ban on established dwellings is a government policy applied through the national interest test rather than a provision of an Act, and it is recorded here on the same basis as the fees.

Victoria introduced the first surcharge, on transfer duty, in July 2015. By January 2019 six of the eight jurisdictions levied a transfer duty surcharge on foreign purchasers; the Australian Capital Territory and the Northern Territory levy none. Since 1 January 2025 New South Wales has had the highest, at 9%.

Before the dates shown, no surcharge applied. Land tax years run by calendar year in New South Wales and Victoria and by financial year in Queensland and Tasmania.

• Settings at quarter end. Each value is the setting in force on the last day of the quarter. A change made partway through a quarter appears from that quarter; the exact dates are given above. Transfer duty follows the date of the contract or instrument, and land tax follows the tax year.
• The land-tax surcharges are not like for like. The Victorian and Queensland surcharges apply to absentee owners and to all taxable land, not to foreign persons holding residential land. Until 30 June 2019 Queensland’s definition of an absentee included Australian citizens living overseas; from that date it excludes citizens and permanent visa holders, and a surcharge on foreign companies and trusts applies at the same rate. The tax base also differs: some surcharges apply to the full land value, others only above a threshold.
• Tasmania’s land-tax surcharge applies only to land acquired on or after 1 July 2022, not to land already held at that date.
• Tasmanian developer reassessments. From 1 July 2026 a foreign developer qualifies for a reassessment of either Tasmanian surcharge after completing 10 dwellings, down from 50. The rates are unchanged.
• Exemptions are not modelled. Exemptions for developers, build-to-rent projects, principal residences and other cases reduce who pays. The register records the rate that applies where no exemption does.
• Tax-treaty relief. Between 21 February 2023 and 8 April 2024, New South Wales did not apply its surcharges to citizens of certain countries with which Australia has a tax treaty. A Commonwealth amendment in April 2024 gave state surcharges priority over the non-discrimination clauses in those treaties, back to 1 January 2018. The recorded rates are those applying to all other foreign persons.
• New Zealand citizens in Victoria. New Zealand citizens became subject to a residence test for the Victorian transfer duty surcharge on settlements from 26 November 2025, and are treated in the same way as other foreign citizens for the absentee owner surcharge from 1 January 2026.
• The reference price is a convention. $1,000,000 is the top of the Commonwealth’s first full fee band. The duty surcharges are proportional, so their share of the price is the same at any price; the fee’s share falls as the price rises.
• None and no land tax are different. “None” means the jurisdiction levies the tax with no surcharge for foreign persons. The Northern Territory levies no land tax at all.
• Some historical nil values are inferred. A small number of nil values, chiefly in the years before a fee or surcharge was introduced, rest on the absence of any enabling provision rather than on a dated version of the legislation.
• Fees are nominal. Dollar amounts are recorded as legislated or scheduled, without adjustment for inflation.

The other seven components of Legislation & Policy Analysis (21300).

The series explained in six tiers, from plain English to expert.