Foreign Buyers - Conveyancing 101: Queensland Property Guide
The Scale of Foreign Investment in Queensland
Foreign buyer activity is rebounding strongly after the COVID downturn. Queensland recorded 1,121 foreign buyer property purchases in 2022-23 (the most recent data available), a significant 17% increase that positioned the state as Australia's second-most popular destination for foreign investment after Victoria.
Nationally, foreign buyers spent $4.9 billion on Australian dwellings in 2022-23.
Important 2024-2025 Changes
- Queensland's Additional Foreign Acquirer Duty increased from 7% to 8% (July 2024)
- From April 2025, foreign investors can no longer purchase established dwellings unless specific exemptions apply
- Land tax surcharges have also increased
Understanding Your Status as a Foreign Buyer
If you're not an Australian resident or don't typically live in Australia, you'll be classified as a foreign person under Australian law. Don't worry though – while this classification does trigger specific requirements and additional costs when purchasing Queensland property (regardless of the property's value), thousands of foreign buyers successfully navigate this process every year.
Key Restrictions for Foreign Property Buyers
Established Properties
Non-resident foreign persons generally cannot purchase existing homes in Australia. Temporary residents may buy one established dwelling, but only as their primary residence.
Permitted Purchases
Foreign buyers can typically purchase:
- Vacant land for residential development
- Newly constructed dwellings
- Land designated for residential development projects
Essential Approvals: FIRB Requirements
What You Need to Know
Every foreign buyer must obtain approval from the Foreign Investment Review Board (FIRB) before purchasing residential property. This approval comes in the form of a "No Objection Notification" under the Foreign Acquisitions and Takeovers Act 1975.
Key Points About FIRB Approval
- Required regardless of property value
- Application fees are substantial and non-refundable if the purchase falls through
- Must be obtained before taking title to the property
- Failure to obtain approval can result in forced property sales and significant penalties
Contract Protection
Always include a special condition in your purchase contract allowing termination if FIRB approval cannot be obtained. Without this clause, you risk substantial financial loss if approval is denied.
Additional Costs for Foreign Buyers in Queensland
Additional Foreign Acquirer Duty (AFAD)
Foreign buyers must pay an extra 7% transfer duty on top of standard transfer duties. This applies to:
- Established homes and apartments
- Vacant residential land
- Land for residential development
- Properties being renovated for residential use
Who Pays AFAD?
You're considered a foreign acquirer if you're:
- A foreign individual (not an Australian citizen or permanent resident)
- A foreign corporation or one with foreign controlling interests
- A trustee of a foreign trust (where foreign interests hold at least 50% of trust interests)
Note: New Zealand citizens with permanent or special category visas are exempt from AFAD.
Ongoing Obligations and Costs
Occupancy Requirements
If your property remains unoccupied or unavailable for rent for more than half the year, the Australian Taxation Office (ATO) may impose an annual fee equal to your original FIRB application fee. This fee was significantly increased in April 2024.
Registration Requirements
You must register your property purchase with the ATO's Register of Foreign Ownership of Australian Assets within 30 days of settlement using their online system.
Notification Obligations
If your status changes within three years of purchase (for example, if you become a foreign corporation or foreign trust trustee), you must notify the Commissioner of State Revenue within 28 days. Failure to do so results in penalty duties and interest charges.
Tax Implications When Selling
Capital Gains Tax Considerations
If you become a foreign resident for tax purposes (typically by living overseas for more than six months annually) and then sell your property, you may lose eligibility for the Capital Gains Tax main residence exemption, even if you previously lived in the property as your primary home.
Determining Tax Residency
Tax residency status can be complex and depends on your individual circumstances. Professional advice is strongly recommended.
Special Circumstances and Relief
Multiple Buyers
If you're purchasing with others and only one buyer is foreign, AFAD applies proportionally to the foreign buyer's interest only.
Development Relief
Australian-based foreign acquirers may qualify for AFAD relief when purchasing residential land for significant development projects. This relief depends on meeting conditions set by the Commissioner of State Revenue.
Essential Action Steps for Foreign Buyers
- Before Signing: Verify your FIRB approval status and include appropriate contract conditions
- During Purchase: Budget for the additional 7% AFAD on top of standard costs
- After Settlement: Register with the ATO within 30 days
- Ongoing: Maintain occupancy records and report any status changes promptly
Professional Advice is Crucial
Given the complexity of foreign buyer regulations and the significant financial implications of non-compliance, professional legal and tax advice is essential throughout your property purchase journey. The penalties for mistakes can be severe, including forced sales and substantial fines.
Remember: These requirements exist alongside standard conveyancing processes, so factor in additional time and costs when planning your property purchase in Queensland.
Need Expert Help with Your Foreign Buyer Property Purchase?
At Cozee, we understand the complexities of foreign buyer regulations in Queensland and are here to guide you through every step of the process. Whether you're dealing with FIRB approvals, AFAD calculations, contract conditions, or more complex situations involving trusts or corporate structures, our experienced team can help ensure your property purchase proceeds smoothly and complies with all legal requirements.
Contact Cozee today for expert advice tailored to your specific circumstances.