“This home is brand new”, “it has just been renovated” and “no one has ever lived in it” are very common statements in property advertisements. For foreign buyers, however, looking new does not mean that a property is a “new dwelling” under Australia’s foreign investment regime.
From 1 April 2025 to 30 June 2029, foreign persons (generally people who are not Australian citizens or permanent residents) are, in principle, prohibited from purchasing established dwellings in Australia, subject to only a small number of specific exceptions. Even if temporary visa holders plan to purchase a home to live in, they generally cannot buy an ordinary second-hand dwelling under the previous rules.
Accordingly, even if a property has only just been built or renovated, a foreign buyer may be ineligible to purchase it if it is still classified as an established dwelling under the foreign investment regime. Before making an offer or signing a contract for sale, buyers should confirm the property’s legal classification rather than relying solely on an agent’s, vendor’s or developer’s description of it as a “new home”.
What Is a “New Dwelling” Under the Foreign Investment Regime?
For a property to be classified as a new dwelling, it will generally need to satisfy several core conditions, including that the dwelling has been built, is being built or will be built, has not previously been sold as a dwelling, and has not actually been occupied.
Accordingly, a dwelling’s recent construction, recent renovation, the fact that the vendor has never leased it or the fact that no one has ever occupied it cannot, on its own, determine whether the property is a new dwelling.
Australia permits foreign investment in the new-dwelling market, with one important policy objective being to increase the housing supply. When determining the nature of a property, it is therefore necessary to consider not only its sales and occupancy history, but also whether the relevant development has genuinely increased the number of dwellings.
Is Off-the-Plan Property Always a New Dwelling?
Foreign buyers can generally purchase off-the-plan property that has not yet been built, but not every off-the-plan property can be purchased without further consideration.
If a foreign buyer purchases a new apartment directly from a developer before it has been sold or occupied, the property will generally be a new dwelling. Some developers may also hold a New or Near-New Dwelling Exemption Certificate. If a valid certificate does in fact cover the relevant development and the specific property, a foreign buyer may not need to apply separately for foreign investment approval for that property.
It is important to note that a developer’s statement that “the project has FIRB approval” does not mean that every property in the development necessarily qualifies for purchase. An exemption certificate may be subject to conditions concerning the specific development, lot number, sale price and proportion sold to foreign buyers. A buyer intending to rely on the developer’s exemption certificate should therefore confirm before the transaction that the certificate does in fact apply to the specific property and transaction.
Another common situation arises when the original buyer has signed an off-the-plan contract but withdraws before settlement, after which the developer offers the property for sale again. If the property has never actually been occupied, it may be a near-new dwelling rather than an ordinary new dwelling. Whether a foreign buyer can purchase it requires further consideration of its previous sales and occupancy history and the scope of any relevant approval or exemption certificate.
Why Is an Extensively Renovated Older Home Unlikely to Be a New Dwelling?
After some older homes undergo extensive renovation, the kitchen, bathroom, plumbing, electrical systems, flooring and even the internal layout may all be renewed. An agent may advertise the property as a “Brand-new residence”, a “brand-new luxury home” or “never occupied since renovation”.
Under the foreign investment rules, however, renovation will generally not change the dwelling’s existing legal character.
If the property was originally an established dwelling and has merely been renovated or altered on the basis of the existing home, it will generally remain an established dwelling even if no one has occupied it since the renovation was completed.
For example, consider a 40-year-old home that is fully renovated and offered for sale again. Although its appearance and living conditions may not differ noticeably from a new home, the more important issue for a foreign buyer is whether the property was created by renovating the original established dwelling, not how recently the renovation was completed.
Descriptions such as “newly renovated”, “first sale after renovation” or “never occupied since renovation” therefore do not, by themselves, establish that a foreign buyer is eligible to purchase the property.
Why Might a New Home Built After Demolishing an Old One Still Not Be a New Dwelling?
Many buyers assume that once an old home has been completely demolished, a newly built dwelling that has never been sold or occupied will naturally be a new dwelling. The assessment under the foreign investment regime is not so simple.
One important factor is whether the development has increased the housing supply.
For example, a parcel of land originally has one detached house. The developer demolishes it and builds a larger, more luxurious detached house on the same site. In construction terms, this is clearly a brand-new house, but there was only one dwelling both before and after the development, so the number of dwellings has not increased.
Accordingly, even if the newly built home has just been completed and has never been occupied, those facts alone cannot establish that it is a new dwelling that a foreign buyer may purchase.
By contrast, if one existing dwelling is demolished and multiple dwellings are lawfully developed on the land, increasing the overall housing supply, the additional dwellings that meet the relevant conditions are more likely to satisfy the requirements for new dwellings.
Can a Foreign Buyer Purchase Vacant Land After an Old Home Has Been Demolished and Build on It?
A foreign buyer can generally apply to purchase vacant residential land and build a dwelling on it. If a dwelling has never previously stood on the land, it will generally be easier to classify it as genuine vacant residential land. After obtaining approval, a foreign buyer will generally need to complete construction within the period specified by the approval, which currently generally requires completion within four years, and must not sell the land before construction of the dwelling is complete.
The position may be different, however, if the land is now vacant but a dwelling previously stood on it and the vendor demolished the old home before the sale.
In that situation, the land’s character cannot be determined solely by asking whether there is a house on it now. Whether a dwelling previously stood on the land, when the original dwelling was demolished and whether the future development will increase the number of dwellings may all affect the land’s classification under the foreign investment regime.
A House-and-land package must likewise be assessed according to its actual circumstances; the name of the contract alone does not determine whether it satisfies the purchase requirements for a foreign buyer.
Can You Sign the Contract First and Obtain Foreign Investment Approval Afterwards?
This is an issue that requires particular attention for foreign buyers.
For an eligible new dwelling or vacant residential land, a buyer may, depending on the circumstances, be able to apply for foreign investment approval or complete the transaction by relying on a valid exemption certificate held by the developer. If the property is actually an established dwelling that is currently restricted, however, the issue may not be when to apply for approval, but whether the buyer is eligible to purchase it at all.
If a buyer first signs an unconditional contract for sale and only later discovers that the property does not meet the purchase requirements, the problem may not be resolved simply by making a late application or paying an additional fee. The buyer may be unable to complete settlement and may face loss of the deposit, liability for breach of contract and risks under the foreign investment rules.
For a foreign buyer, therefore, it is best to confirm the property’s legal classification under the foreign investment regime and the buyer’s eligibility before making an offer or signing a binding contract for sale.
NS Legal Lawyers Answer Foreign Buyers’ Common Questions
Why Might I Still Be Unable to Buy a Home That Has Just Been Built and Has Never Been Occupied?
“Never occupied” is only one factor in determining whether a property is a new dwelling. If the home has previously been sold as a dwelling, or was rebuilt after an existing dwelling was demolished without increasing the housing supply, the facts that it has just been built and has never been occupied do not establish that it meets the new-dwelling requirements.
The Previous Off-the-Plan Buyer Did Not Complete Settlement. Can I Purchase It as a New Home?
Not necessarily. The property may be a near-new dwelling, and it is necessary to confirm whether it has ever been occupied, the circumstances of the previous transaction, and whether the relevant foreign investment approval or developer’s exemption certificate covers it.
The Developer Says the Entire Project Has FIRB Approval. Do I Still Need to Apply Separately?
This depends on the specific circumstances. The buyer should confirm that the developer’s exemption certificate is valid and covers the specific development, lot number and transaction conditions. If the proposed property is outside the certificate’s scope, the buyer may still need to obtain the relevant approval independently.
Can I Buy Vacant Land After the Old Home Has Been Demolished and Build My Own House?
The assessment cannot be based solely on the fact that the land is currently vacant. Whether a dwelling previously stood on the land, the circumstances in which the old home was demolished and whether the completed development will increase the housing supply may all affect the property’s classification and the foreign buyer’s eligibility. The land and development history should therefore be assessed before a contract is signed.
How Can NS Legal Lawyers Assist Foreign Buyers?
For a foreign buyer, whether a property can be purchased cannot be determined solely from a property advertisement, the year of construction, the home’s appearance or a developer’s oral statement.
Before the transaction, NS Legal lawyers can help you review the property’s sales and occupancy history and its land and development history; analyse whether it may be a new dwelling, near-new dwelling, vacant residential land or established dwelling under Australia’s foreign investment regime; and provide legal advice based on your status and the specific transaction arrangements.
If you plan to purchase a newly completed detached home, an extensively renovated older home, a knockdown-rebuild development, an off-the-plan property offered for resale after the original transaction ended, or a property in reliance on a developer’s New or Near-New Dwelling Exemption Certificate, you should confirm the relevant legal classification and your eligibility before making an offer or signing a contract, so that you do not discover a problem only after the contract has become binding.
Disclaimer: This article is for general information only and does not constitute legal advice for any person or specific transaction. Eligibility to purchase and foreign investment requirements must be assessed case by case according to the buyer’s status, the property and the transaction arrangements.
