Federal budget 2025: Foreign buyers to be banned from purchasing existing homes

The government is cracking down on foreign buyers purchasing existing homes as it was revealed only 45,000 houses out of a 1.2m target have been built.

The Albanese government will ban foreign owners from purchasing existing homes for two-years as part of a $33 billion plan to slash the cost of housing amid an entrenched affordability crisis.

A Treasury spokesman clarified that the government has built nearly 140,000 houses since a target of 1.2m new dwellings in five-years was set by the National Housing Accord.

The federal budget said, “Nearly 45,000 new homes were completed in the first quarter of the Accord.”

The latest federal budget has also revealed that net overseas migration has blown out by about 75,000 people to 335,000, likely increasing pressure on an already overstretched housing market.

The Albanese government will ban foreign owners from purchasing existing homes for two-years. Picture: Sam Ruttyn

The Albanese government has announced $5.7m for the Australian Taxation Office to enforce a ban on foreign nationals purchasing established homes from April 1.

Another $8.9m will be provided to the ATO to crack down on foreign buyers land banking and enforcing that vacant land is put to productive use within a relevant time frame.

Australia is facing a long running housing affordability crisis due to high demand and low supply, a problem that has been worsened by sky-high building costs, a shortage of skilled workers and rising construction company insolvencies.

Australian Housing and Research Institute managing director Dr Michael Fotheringham said the nation was facing a housing crisis after decades of poor policy and sector neglect by both major parties.

“It’s not going to be a quick fix,” he said.

Another $8.9m will be provided to the ATO to crack down on foreign buyers land banking. Picture: Getty Images

The Australian Housing and Urban Research Institute managing director Dr Michael Fotheringham. Picture: Supplied

“It’s going to take quite a long time to dig us out of this mess and working cooperatively with industry to get there.”

The federal budget also includes grants of up to $10,000 for eligible construction apprenticeships from July 1 in a bid to address the skills shortage that has delayed the building of new homes.

Some employers may be eligible for an additional $5,000 from July 1 if they are hiring high priority workers, including some positions in construction.

KPMG urban economist Terry Rawnsley said increasing supply had been delayed by a “perfect storm” of rising construction costs, construction companies going bust and delays at various levels of government.

“The other depressing aspect is given the way the housing market works, any policy change announced won’t result in new housing stock for one, two to five years,” he said.

KPMG urban economist Terry Rawnsley.

“Housing has such a long lead time before we start to see policy levers take effect.”

The Help to Buy program, which allows aspiring homeowners struggling to save a deposit to co-purchase a home will be expanded, with $800m to raise the equity contribution by 40 per cent in a bid to help 40,000 Australians get into the property market.

Shadow housing minister Michael Sukkar said the Help to Buy shared equity scheme was a “completely useless program” because Australians did not want to co-own a home with the government.

“We want to see a plan to reverse the catastrophic damage they’ve done to the housing market since last the election,” he said.

Shadow housing minister Michael Sukkar said the Help to Buy shared equity scheme was a “completely useless program”. Picture: NewsWire

“Fewer homes are being built and fewer homes are being approved.”

The government has committed $1.5b to state and territory governments under the Housing Support Program and is supporting the construction of 55,000 social and affordable homes through initiatives such as the Housing Australia Future Fund.

The government will also provide $9.3b in funding to state and territory governments to address homelessness, provide crisis support and maintain and repair social housing.

An additional $1b has been given to the National Housing Infrastructure Facility to support crisis accommodation for women and children fleeing domestic and family violence and youth facing homelessness.

Originally published as Federal budget 2025: Foreign buyers to be banned from purchasing existing homes