Labor Pledges 2-Year Ban on Foreign Property Ownership

A general view of housing in the suburb of North Sydney facing towards the central business district (CBD) in Sydney, Australia, on June 28, 2024. Lisa Maree Williams/Getty Images

Labor has promised to introduce a two-year ban on foreign ownership of existing Australian property, mirroring a Coalition policy intended to alleviate pressure on the housing market.

The ban will prevent foreign investors—including temporary residents like international students and foreign-owned companies—from purchasing established dwellings from April 2025 until March 2027.

New dwellings will remain available for purchase to foreign investors to encourage house supply.

From July 2022 to June 2023, foreign investors accounted for 5,360 residential real estate purchases in Australia, and only around a third of those purchases were existing dwellings. The ban will capture around 0.4 percent of the Australian housing market.

“We are going to ban foreign ownership of existing property in Australia,” Housing Minister Clare O'Neil told Sky News Australia on Feb. 16.

She said the ban is part of a bold and ambitious housing agenda that the government is implementing and Labor has been looking at this for a while now. 

“I’m a politician, and my job is to make good public policy for the country. I do think this is good public policy, and that’s why the government’s announcing it today,” she said. 

Cost of Ban

The government will inject $1.4 million annually into the Australian Tax Office (ATO) to enforce the ban and boost screening of foreign investment proposals.

Additionally, to increase auditing and compliance, the ATO and Treasury will recieve $2.2 million per year until 2029 to 2030, and $1.9 million annually afterwards.

To crack down on land-banking, the government will also force foreign investors to develop vacant land purchased within a reasonable time frame.

“This is an important move. It’s not a silver bullet to the housing crisis, because there is no silver bullet,” O’Neil said.

She said that given housing pressures, government efforts need to be oriented around housing security and where possible, home ownership for a broader range of young Australians. 

Policy Impact

Property Council Australia said that, on its own, banning foreign purchases of existing property would not solve housing unaffordability, since foreign ownership of existing Australian homes is low.

However, its executive for policy and advocacy, Matthew Kandelaars, said the carve-outs for new builds were welcome, since every effort is needed to boost housing supply.

“It’s pleasing that both major parties have recognised that building new homes is the most important way our nation will address its housing affordability challenge,” he said.

“Australia has relied on global investment—using other peoples’ money to help build and shape our cities for the last three quarters of a century, and we shouldn’t stop now.”

Meanwhile, Greens housing spokesperson Max Chandler-Mather said Labor and the Coalition were locked in a race to the bottom by blaming immigration for housing affordability.

“Dutton and Labor are insulting the intelligence of Australians, pretending like this will do anything to help fix the housing crisis,” he said.