Foreign buyers of Queensland homes: approval, duty and land tax surcharge

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Kooky

Builder of Shaka, the payment router that pays every agent their commission on closing date.

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A person who is not an Australian citizen or permanent resident can buy a home in Queensland, but not any home, and not on the same terms as a local buyer. Three sets of rules apply at once. The Commonwealth decides whether the purchase is allowed at all. The State then charges an additional duty on the purchase and, each year afterwards, a surcharge on the land. Each regime has its own definition of who is foreign, and a buyer can be caught by one and not by another.

This guide walks through the three in the order a buyer meets them: federal approval through the Australian Taxation Office, additional foreign acquirer duty at settlement, and the land tax surcharge once the property is owned. It also covers the people the rules surprise most often, including temporary visa holders, New Zealand citizens, couples where one partner is foreign, and Australian companies and trusts with overseas owners. The rules are those published by the ATO and the Queensland Revenue Office at the time of writing. They are described in general terms, and a real purchase needs advice on its own facts.

Australian Taxation Office, foreign investment in residential real estate; Queensland Revenue Office, additional foreign acquirer duty and land tax for absentees and foreign entities.

Three regimes, three definitions

The first thing to understand is that there is no single test of foreignness. The Commonwealth applies the Foreign Acquisitions and Takeovers Act 1975. Queensland applies its own duties and land tax legislation. The outcomes overlap but are not identical.

Under the federal rules, the ATO says, an individual is a foreign person if they are not an Australian citizen, not an Australian permanent resident and not a New Zealand citizen holding a special category visa. It adds a caution that a permanent resident who does not ordinarily live in Australia may still be a foreign person in some circumstances, and that the definition extends to corporations, trusts and other entities in ways that are not always obvious.

For Queensland duty, the Queensland Revenue Office defines a foreign individual as someone who is not an Australian citizen or permanent resident, and treats a New Zealand citizen holding a special category visa as a permanent resident for this purpose.

For Queensland land tax, the test is different again. The surcharge applies to an absentee, which the Revenue Office defines as a foreign individual, expressly including New Zealand citizens, who does not hold a permanent visa and does not usually live in Australia. Residence, not just visa status, is part of that definition.

The practical consequence is that each regime has to be checked separately. A New Zealand citizen living in Brisbane on a special category visa needs no federal approval and pays no additional duty. The same person, having moved back to Auckland and kept the property, can be an absentee for land tax.

Federal approval: who needs it

The Foreign Investment Review Board framework requires a foreign person to obtain approval before acquiring an interest in residential land. For residential property the application is made to the ATO, through its online services for foreign investors, not through the Treasury portal used for commercial investment.

The foreign investment website lists the people who do not need to apply: Australian citizens living abroad, New Zealand citizens who hold or are eligible for a special category visa, holders of Australian permanent visas, and a foreign person buying as a joint tenant with a spouse who is an Australian citizen, a permanent resident or an eligible New Zealand citizen.

Everyone else does. That includes temporary residents, whom the ATO describes as people holding a temporary visa that permits a continuous stay of 12 months or more, whatever time is left on it, or a bridging visa while awaiting a decision on a permanent visa application. It also includes people living overseas with no Australian visa at all.

The spouse exemption is narrower than it sounds. It applies to a purchase as joint tenants, the form of ownership in which each partner owns the whole and the survivor takes the property. It is a federal exemption only, and as the duty section below shows, it does not remove the State's additional duty on the foreign partner's share.

Approval has to be in place, or the contract made conditional on it, before the buyer is bound. Buying first and applying afterwards is a breach of the rules, and the ATO, which publishes how it checks compliance by foreign owners, can issue infringement notices or seek civil penalties.

What a foreign person can and cannot buy

The answer changed on 1 April 2025. From that date, the ATO says, foreign persons are banned from purchasing established dwellings. The ban was originally due to end on 31 March 2027 and has since been extended to 30 June 2029. It applies to temporary residents as well, who before the ban could apply to buy one established home to live in.

The ATO notes limited exceptions, including for foreign companies that need to house workers from Pacific island countries and Timor-Leste under the Pacific Australia Labour Mobility scheme.

What remains open is, in broad terms, anything that adds to the housing stock.

A new or near-new dwelling, in the ATO's description, is one built on residential land or forming part of a residential development that has not been previously sold as a dwelling, or was sold by the developer in a sale that failed to complete, and has been occupied for less than 12 months in total. An apartment bought off the plan from a developer is the standard case.

Approval to buy vacant land comes with an expectation that a dwelling will be built on it, and approval to buy an established dwelling for redevelopment depends on the redevelopment taking place. Approvals carry conditions, and the conditions are enforced.

The distinction between new and established matters twice over in Queensland. It decides whether the purchase is permitted, and it shapes the market a foreign buyer is shopping in: new apartments, house and land packages, and vacant lots, mostly in south-east Queensland.

The application fee and the vacancy fee

Applying costs money whether or not the purchase proceeds. The ATO publishes a fee schedule for each financial year, indexed on 1 July. For 1 July 2026 to 30 June 2027, the fee for a new dwelling or vacant land starts at $4,600 where the price is under $75,000 and rises in steps with the price, reaching $1,245,500 for a property over $40 million. The fees for established dwellings, which now matter only for the limited exceptions and for redevelopment, are three times as high at the bottom of the scale, starting at $13,800.

A developer selling new dwellings to foreign buyers can hold an exemption certificate for the project, so that individual buyers do not each need their own approval. The ATO lists the initial application fee for that certificate at $67,400 in 2026-27, with a further fee for each dwelling sold to a foreign person. A buyer purchasing under a developer's certificate should still confirm what is covered.

The second federal charge is ongoing. A foreign owner of a dwelling must lodge a vacancy fee return each year, within 30 days of the end of each 12-month vacancy year, which runs from the date of settlement. The ATO says the fee is avoided if the dwelling is residentially occupied for at least 183 days in the year: lived in by the owner, let on a lease or licence of at least 30 days, or genuinely available for rent on those terms. Short stays of under 30 days do not count toward the 183 days.

The vacancy fee is not small. For vacancy years starting on or after 9 April 2024 it is double the application fee that was paid for the property. Failing to lodge the return makes the fee payable automatically, whatever the actual occupancy, and the ATO requires records to be kept for at least five years after each vacancy year. The obligation applies to dwellings bought under applications made after 9 May 2017 and does not apply to vacant land with no dwelling on it.

Foreign owners must also record their interest on the Register of Foreign Ownership of Australian Assets, which the ATO administers.

Additional foreign acquirer duty

At settlement, Queensland adds its own charge. Additional foreign acquirer duty, known as AFAD, is described by the Queensland Revenue Office as an extra 8 per cent of duty that applies to transactions liable for transfer duty, landholder duty or corporate trustee duty. It is charged on top of ordinary transfer duty, not instead of it.

AFAD applies to what the Revenue Office calls AFAD residential land: land in Queensland that is or will be used solely or primarily for residential purposes. That covers houses and apartments, vacant land on which a home will be built, and residential development sites, including mixed-use projects with a residential component. It does not cover land used for hotels and motels. Retirement villages and student accommodation are assessed case by case.

The duty is calculated on the foreign buyer's share of the dutiable value, which is the purchase price including any goods and services tax, or the market value if higher, together with any chattels bought in the same transaction. The Revenue Office gives two worked examples.

In the first, a foreign individual buys an investment property for $980,000. Transfer duty is $37,125. AFAD is 8 per cent of $980,000, or $78,400. The total is $115,525, more than three times what a local investor would pay.

In the second, two people buy a home for $800,000 in equal shares, and only one of them is foreign. Transfer duty on the purchase is $29,025. AFAD applies to the foreign buyer's half: 8 per cent of $400,000, or $32,000. The total is $61,025. This is the case of the couple mentioned earlier. The federal rules may exempt the foreign spouse from needing approval, but the State still charges AFAD on that spouse's share.

Two further points come from the same guidance. A home concession, which reduces transfer duty for a buyer who will live in the property, reduces transfer duty only. AFAD is still charged in full on the foreign buyer's share. And the documents must be lodged for assessment within 30 days where AFAD applies.

One group of individuals is exempt: the Revenue Office says specified foreign retirees buying their principal place of residence have been exempt from AFAD since 1 January 2023.

Companies and trusts with foreign owners

AFAD is not confined to individuals, and this is where Australian buyers are sometimes caught. A company incorporated in Australia is a foreign corporation for AFAD if foreign persons, or people related to them, hold a controlling interest of at least 50 per cent. A trust is a foreign trust if at least 50 per cent of the trust interests are held by foreign individuals, foreign corporations, trustees of foreign trusts, or persons related to any of them.

The related-person rules are wide. The Revenue Office says they take in family members, companies in the same group, and individuals connected to a company or trust through majority shareholding, directorship or a beneficial interest. A family discretionary trust set up to hold an investment property, with one adult child living permanently overseas among its beneficiaries, needs to be examined against these rules before it signs a contract.

The assessment does not end at settlement. If AFAD was not charged because the buyer was not foreign, the transaction must be reassessed if, within three years, the company that bought becomes a foreign corporation or the trust becomes a foreign trust. The company or trustee has 28 days from the change to notify the Commissioner of State Revenue and lodge the documents. A share sale or a change of beneficiaries two years after a purchase can therefore bring an 8 per cent bill with it.

There is relief for developers. For transactions entered into on or after 15 December 2025, the Revenue Office administers an exemption for Australian-based foreign corporations and trusts whose commercial activities add to the supply of housing in Queensland; for earlier transactions the same purpose was served by ex gratia relief. A developer can seek pre-approval before a transaction and final approval after it. The relief is aimed at entities building housing, and it is not available to an individual buying a home.

The land tax surcharge, every year

Land tax in Queensland is assessed on the taxable value of the land an owner holds at midnight on 30 June each year. It is charged on land value, not on the value of the buildings, and for an apartment the owner's share of the land under the building is what counts.

For absentees, and for foreign companies and trustees of foreign trusts, the Revenue Office applies a lower threshold and an additional surcharge. Liability begins when the total taxable value of the owner's land is $350,000 or more. From that point the ordinary rate applies, and on top of it a surcharge of 3 per cent of the taxable value above $350,000.

The Revenue Office's own example uses a taxable value of $400,000. The tax is $1,450 plus 1.7 cents for each of the $50,000 above the threshold, which is $850, making $2,300. The surcharge is 3 per cent of the same $50,000, or $1,500. The total is $3,800 for the year.

Three features of the surcharge deserve attention. Values are aggregated, so two modest holdings can cross the threshold together. Absentees cannot claim the home exemption that removes an owner's principal place of residence from land tax, according to the Revenue Office. And status is tested each 30 June, so an owner who becomes an absentee by moving overseas, or stops being one by gaining a permanent visa and settling in Australia, moves into or out of the surcharge from the next assessment.

For foreign companies and trusts, the definitions mirror those for duty: a company incorporated outside Australia, or one in which foreign persons hold at least a 50 per cent controlling interest, and a trust in which at least 50 per cent of the interests are held by foreign persons. For liabilities arising on or after 30 June 2026, the Revenue Office describes an exemption from the surcharge for entities carrying on commercial activities and for large residential developers; for earlier years the equivalent was ex gratia relief for entities making a significant contribution to the Queensland economy and community.

Putting the three together

The order of events for a foreign individual buying a new apartment is broadly this, though each purchase differs.

The cumulative effect is considerable. On the Revenue Office's $980,000 example, AFAD alone is $78,400 at settlement, before the federal application fee and before any annual land tax. That is a cost a local buyer competing for the same new apartment does not bear, and it is a cost the foreign buyer does not recover on resale, because the next buyer pays duty on their own purchase.

Selling and leaving

The rules continue to apply at the other end of ownership. A foreign owner who sells remains within the federal capital gains tax system as it applies to Australian real property, and on 10 September 2026 the Treasurer announced that legislation strengthening the taxation of foreign residents' capital gains on Australian land and closely connected assets had passed the Parliament. The detail of how those rules apply to a sale is a matter for a tax adviser.

Changes of status matter as well. A temporary resident who becomes a permanent resident stops being a foreign person for future purchases, and can then buy an established home. A dwelling bought as new by a foreign person becomes an established dwelling once it is sold on, which means, while the ban lasts, the next buyer generally cannot be another foreign person.

Where the rules are published

The ATO publishes the federal rules for residential property, the fee schedule for the current financial year, the vacancy fee guidance and access to the register. The foreign investment website maintained by Treasury carries the guidance notes on the legislation. The Queensland Revenue Office publishes the AFAD and land tax rules, the definitions of foreign persons, corporations and trusts, and the application forms for exemptions.

All three regimes have changed in the past two years: the ban on established dwellings began in 2025 and has been extended, the vacancy fee was doubled in 2024, and Queensland replaced ex gratia relief with statutory exemptions for developers. Anyone relying on what applied to a purchase made a few years ago should read the current pages before signing anything.

Kooky, from Shaka

Kooky edits Queensland Estate and builds Shaka, the payment router he made for Queensland property professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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