Buying property in Australia as an American – is it hard?

Australia, with its stunning coast, high quality of life, and stable economy, is a dream destination for many Americans seeking a holiday home, investment, or retirement location.

But can Americans actually buy real estate there? The short answer is yes, but it comes with significant restrictions and costs compared to buying back home. The Australian government strictly regulates foreign investment to ensure housing remains affordable for locals.

Use Wise to save money on your property purchase

Buying a property abroad is a big step and involves important financial decisions. Wise, an international money transfer company, provides specialist support to help you navigate large international transfers and save on exchange fees. Fill out Wise’s online form today to find out how they can assist you.

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Can Americans buy property in Australia?

American citizens can buy property in Australia, but you will almost certainly need approval from the Foreign Investment Review Board (FIRB) before you purchase.

The rules differ depending on whether you are a non-resident (living in the US) or a temporary resident (living in Australia on a valid visa, such as a work visa).

• New Dwellings: Non-residents can generally buy new properties (brand new apartments or townhouses that have never been lived in) without many restrictions, as this adds to the housing stock.
• Established Dwellings: Non-residents are generally prohibited from buying established (existing) homes. You cannot buy a charming old cottage in Melbourne as a holiday home if you live in the US.
• Temporary Residents: If you live in Australia on a temporary visa, you can typically buy one established dwelling to live in as your primary residence. You generally must sell it within three months of leaving the country.

When you are ready to pay your deposit or complete the purchase, Wise offers an easy-to-use, low-cost way to move your money to Australia.

What buying property gets you

• A foothold in a stable market: Australia’s property market has historically been robust and resilient.
• Rental yields: If you buy a new property, you can rent it out to tenants.
• A holiday home: You can use a newly built property as a holiday retreat, provided you follow vacancy rules.

What buying property does not get you

It is crucial to understand that buying property in Australia does not grant you residency or a visa.

Unlike some countries that offer “Golden Visas” or citizenship-by-investment schemes, Australia has no such program linked to passive residential property investment. You will still need to qualify for a visa (skilled, business, or family) on your own merits to live there.

How difficult is the process?

The process is more administrative than difficult. The key hurdle is obtaining FIRB approval before you commit to a purchase.

Most contracts for foreign buyers must include a clause stating the sale is “subject to FIRB approval.”

If you sign an unconditional contract without approval, you could face heavy fines or be forced to sell the property.

Typical timelines

• FIRB Approval: Once you submit your application and pay the fee, the decision typically takes up to 30 days, with another 10 days to notify you.
• Settlement: The standard settlement period in Australia is 30 to 90 days (commonly 42 days) after the contract is exchanged.

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Transferring money to Australia for the purchase

When buying a property abroad, the exchange rate can make a significant difference to the final price you pay. Banks often add a markup to the exchange rate, which means you could end up paying more than necessary.

You can use Wise to send money to Australia at the mid-market exchange rate—the one you see on Google—with transparent fees.

Wise allows you to handle the payment in two ways:

• Pay the seller directly: You can transfer the funds directly to the seller or their solicitor/conveyancer.
• Transfer to yourself: If you have already opened an Australian bank account, you can use Wise to move money from your US account to your Australian account before the settlement date.

Read more about how Wise protects customers’ money

What are the tax implications?

Taxes for foreign buyers in Australia are substantial and can significantly impact the cost of your investment.

In Australia

• Application Fees: You must pay a fee to apply for FIRB approval. As of 2024-25, fees start around AUD 14,100 for properties valued under AUD 1 million and increase with the property value.
• Stamp Duty Surcharge: In addition to standard stamp duty (a tax on property transfers), most Australian states (NSW, VIC, QLD, WA, SA, TAS) charge an additional Foreign Buyer Surcharge. This can add 7% to 9% to the purchase price depending on the state.
• Vacancy Fee: If your property is not residentially occupied or rented out for at least six months in a year, you may be liable for an annual vacancy fee, which is typically equal to your original FIRB application fee.
• Capital Gains Tax (CGT): Foreign residents are subject to CGT on the sale of property. Notably, foreigners are not eligible for the 50% CGT discount that Australian residents receive for holding assets for more than 12 months.

In the US

• Reporting: As a US citizen, you must report your global income to the IRS. You will likely need to report the Australian property and any rental income.
• Tax Credits: The US and Australia have a tax treaty. You can generally claim a Foreign Tax Credit on your US return for taxes paid in Australia to avoid double taxation, but you should consult a cross-border tax specialist.

Local laws and regional variations

Property laws and taxes are state-based in Australia, meaning the costs vary depending on where you buy.

• New South Wales (Sydney) & Victoria (Melbourne): These states have some of the highest foreign buyer surcharges (9% / 8% respectively in addition to standard stamp duty) and land tax surcharges.
• Queensland: Charges an additional 8% duty (AFAD) for foreign buyers.

Always check the State Revenue Office website for the specific state you are interested in.

Renting out your property: is it allowed?

Yes. If you purchase a new dwelling as a non-resident, you are free to rent it out to private tenants. In fact, the government encourages this to avoid the property sitting empty.

However, if you are a temporary resident who bought an established dwelling to live in, you generally cannot rent it out. It must be your principal place of residence. If you move out, you usually have to sell it.

Buying land in Australia

Can Americans buy vacant land? Yes, but with conditions.

If you buy vacant land, you usually must complete construction of a residential dwelling within four years of the approval date. You cannot simply buy land and hold it for speculation (land banking).

Getting a mortgage: should I get one in Australia or the US?

Australian Banks

It is possible for US citizens to get a mortgage in Australia, but it is becoming harder.

• Lower LVR: Banks may only lend up to 60% or 70% of the property value to non-residents.
• Higher Rates: You might face higher interest rates than local borrowers.
• Approval: You will need to prove your foreign income, and some banks may not accept US-based income for loan serviceability.

US Banks

Most US banks will not offer a mortgage for a property located in a foreign country because they cannot easily foreclose on the asset if you default. You might be able to use a Home Equity Line of Credit (HELOC) on your US home to fund the Australian purchase in cash.

Tip: If you are moving money from the US to Australia for a deposit, be aware of exchange rates and fees. Banks often charge high markups.

The verdict: should you buy a house in Australia as an American?

Buying in Australia is a lifestyle choice or a long-term diversification strategy, not a “get rich quick” scheme.

Pros

• Lifestyle: Own a home in one of the most beautiful and liveable countries in the world.
• Stability: Australia has a transparent legal system and a secure property title system (Torrens title).
• New Builds: High-quality modern apartments are available in major cities like Sydney, Melbourne, and Brisbane.

Cons

• High Entry Costs: The FIRB fees and stamp duty surcharges can add 10-15% to the purchase price upfront.
• Restrictions: You are mostly limited to new properties, which can sometimes suffer from oversupply issues in city centers.
• Taxes: High transaction costs and no CGT discount reduce investment returns.

Useful resources

Foreign Investment Review Board (FIRB) – Official government guidance on residential real estate rules for foreign investors.

Australian Taxation Office (ATO) – Current application fees for foreign residential investors.

Revenue NSW – Information on the 9% surcharge purchaser duty in New South Wales

State Revenue Office Victoria – Details on the 8% additional duty for foreign purchasers in Victoria

Queensland Revenue Office – Details on the 8% additional foreign acquirer duty in Queensland

Australian Taxation Office (ATO) – Rules regarding the annual vacancy fee for foreign owners

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