Can a foreign buyer purchase a townhouse in Australia?

The test for a new townhouse

The law does not treat townhouses as a separate type of home. The test applies to any dwelling. A new dwelling is one that:

• will be, is being, or has been built on residential land;
• has not been previously sold as a dwelling; and
• has not been previously occupied.

Treasury says a property is "sold" once a binding purchase agreement exists, whether or not the sale has settled.

The guidance also says what is not new. A refurbished or renovated established home is not new. Nor is a single dwelling built to replace one or more demolished established dwellings. Treasury's example is an owner who knocks down a house and builds a new one: the new dwelling is treated as established, even if larger or better quality, because it does not add to housing supply. The new dwelling definition does not separately address knocking down one house and building several townhouses on the site, so that is a question for the ATO or a conveyancer.

Townhouses that fall outside the new dwelling rules

The ban has limited exceptions that need approval: buying established dwellings for a redevelopment adding at least 20 dwellings, buying on a commercial scale such as build-to-rent or student accommodation, and certain employers housing Pacific and Timor-Leste workers. None is aimed at an individual buying a single townhouse.

The Act and Regulation give some dwellings in a "development" a little more room. A dwelling the developer sold that has been occupied for no more than 12 months in total can still be new, and a dwelling whose earlier sale by the developer failed to settle can be near-new. Both depend on the Act's meaning of "development", discussed next.

Developer certificates and townhouses

Townhouses are mentioned in the Act in one place: the definition of a "development". A development is one or more multi-storey buildings under one development approval, with at least 50 independent self-contained dwellings other than townhouses. Treasury's guidance on developer exemption certificates uses the same wording.

On that wording, a project made up only of townhouses does not reach the 50-dwelling count, so a developer's certificate of the kind Treasury describes would not ordinarily be available for it. A mixed project with 50 or more apartments plus some townhouses depends on how the certificate is worded. The ATO tells buyers to ask the developer whether it already holds a certificate for the dwelling. If no certificate covers it, the buyer needs their own approval. The developer certificate guide goes through this in detail.

How a townhouse buyer is approved

There are two usual routes, both handled by the ATO for residential land:

• A no objection notification for a specified property, applied for by the buyer.
• The buyer's own residential land exemption certificate, which covers one new dwelling in a named state or territory up to a stated price, generally for 12 months. It suits auctions because it is not tied to one property.

Approval is generally given subject to the price being no greater than the approved value. After that there are generally no conditions on use, so the owner can live in the townhouse or rent it out. There is no limit on how many new dwellings a foreign person can buy.

Worked example (2026-27 fees). Take a newly built townhouse priced at $850,000. For 2026-27 that falls in the "$1 million or less" band, so the application fee is $15,600. A townhouse at $1,250,000 falls in the "$2 million or less" band: $31,300. If either home was occupied or available to rent on fewer than 183 days in a vacancy year, the vacancy fee would be double the fee paid: $31,200 and $62,600. See fees and the vacancy fee amount guide. State surcharges are separate (see state surcharges).

After buying, and when selling

The buyer registers the property within 30 days of settlement and lodges a vacancy fee return every year. When a foreign owner sells, a register notice is also required. Treasury's description of the usual conditions on a new dwelling covers the price and says there are generally no ongoing conditions on use. It does not list a restriction on selling.

What does change on resale is who the next buyer is. A townhouse that has been sold and lived in is established. A later buyer who is a foreign person would face the established dwelling ban. Buyers who are not foreign persons are not caught. Treasury's examples say holders of permanent visas, and New Zealanders holding or eligible for a Special Category visa, need no FIRB approval to buy residential property.

Current new townhouse projects are listed at townhouseaustralia.com.au. Whether a project is open to foreign buyers depends on the property, any certificate, and the buyer's own approval.

Frequently asked questions

firbapproval.com.au is an independent guide. It is not affiliated with, endorsed by or connected to the Foreign Investment Review Board, the Australian Treasury or the Australian Taxation Office. We do not lodge or process applications. Applications are made to the ATO. General information only, not legal, tax, migration or financial advice.