Foreign-owned property and real estate companies in Australia

Foreign-owned property vehicles in Australia face two layers of extra cost and approval: Commonwealth foreign investment screening, and state foreign purchaser surcharges on duty and land tax. An Australian Pty Ltd holding the asset still needs an Australian-resident director under s201A of the Corporations Act. That director takes responsibility for keeping FIRB conditions, vacancy obligations and annual surcharge assessments under control.

We don't advise on FIRB, duty or land tax. This page sets out the moving parts so you can brief your lawyer and tax adviser properly, and so you know what your board will be signing up to.

Typical structures we see

A foreign investor usually holds Australian property through one of three vehicles:

• A single-asset Pty Ltd (SPV) for one building or site. It's clean to sell, finance and wind up.
• A Pty Ltd as trustee of a unit trust, which is common for development and income-producing property. The company is the trustee and the trust holds the asset, so the board makes the trustee's decisions.
• A holding company above several SPVs, often with sister companies for each project. See our page on holding companies.

Under the Commonwealth foreign investment rules, any of these is a foreign person if a foreign holder has 20% or more, or several foreign holders have 40% in aggregate. Each state applies its own test for its surcharges.

Commonwealth screening, by land type

Treasury administers commercial and agricultural land. The ATO administers residential real estate (Treasury: foreign investment). The thresholds in the 2026 table for private investors are:

"Sensitive" developed commercial land is defined to include land leased to a government body, land fitted out for sensitive or bulk data storage, land with a mining operation on it, and public infrastructure such as an airport or port. A data centre or a government-tenanted office is therefore assessed at the lower threshold. Our FIRB guide covers fees and timing.

Residential: what the 2026 rules mean for SPVs

Treasury's residential land guidance steers foreign money towards new housing:

• Established dwellings: from 1 April 2025 to 30 June 2029, foreign persons are generally banned from buying them, subject to limited exceptions such as redevelopment that adds significantly to housing stock.
• Vacant residential land: approval generally comes with conditions to complete construction within four years and not sell until it's built. Evidence of completion must be lodged within 30 days of receiving it.
• Developers selling to foreign buyers: a developer can hold an approval that covers its foreign customers for new dwellings, so individual buyers generally don't need their own.
• Vacancy fee: a foreign owner of a dwelling pays an annual vacancy fee if it isn't occupied or genuinely available for rent for more than 183 days in a year.

Each of these is a board-level compliance item. If the SPV misses a construction deadline or leaves a unit empty, the company is in breach, and the directors are the ones asked about it.

State foreign purchaser surcharges

These apply on top of ordinary transfer duty and land tax, and are set by each state's revenue office. The rates below are from the official pages as at 27 October 2026.

Other states and territories have their own rules. Check each one with your adviser before you sign a contract.

Three things that catch foreign-owned SPVs

1. The scope differs by state. NSW's surcharge land tax excludes commercial and primary production land. Queensland's foreign surcharge applies to all taxable land over the threshold, and Victoria's absentee owner surcharge is calculated on the total taxable value of land you own there. A foreign-owned office SPV can therefore pay a surcharge in Brisbane or Melbourne but not in Sydney.
2. The foreign-status test is the state's, not FIRB's. Victoria treats an Australian-incorporated company as foreign where a foreign person has a controlling interest (SRO). NSW points to its own revenue ruling. A structure that passes one state's test may fail another's.
3. The surcharges recur. Duty is paid once, but the land tax surcharges are assessed every year. Victoria's exemptions from its absentee surcharge are narrow. One example covers an Australian-incorporated company that owns land in its own right and runs a commercial operation in Victoria with local labour, materials and services.

Queensland and WA both refer to exemption or refund arrangements for some residential developers. These have conditions, so ask your adviser whether your project qualifies.

Why property SPVs need a careful director

Development companies are often thinly capitalised and rely on shareholder loans and construction finance. A resident director must be satisfied that the company can pay its debts as they fall due, so we look closely at funding and cash flow before accepting an appointment. Our guide to insolvent trading and safe harbour explains why.

What we put in place for a property vehicle:

• the FIRB approval letter and every condition logged against a date;
• vacancy and occupancy evidence reviewed each year;
• land tax assessments, including surcharges, checked against the tax adviser's expectations;
• solvency resolutions backed by real cash-flow information, not just a template.

Our Governance Partner package (A$8,990 a year, ex GST) includes FIRB-condition tracking, a company secretary and up to two related entities. That suits a holding company with a couple of SPVs. You can compare all the packages on our pricing page.

General information only, current at 27 October 2026. It is not legal, tax, duty or foreign investment advice. State rates and exemptions change, so confirm them with your adviser before you buy.

General information about Australian law and practice, not legal or tax advice for your circumstances. Check the official sources, or ask your adviser, before you act.