Government Policy Changes Affecting Expat Mortgages in 2025

2025 rule changes in plain English: Can expats still buy established homes in Australia?

In 2025 the Australian Government introduced a temporary ban on foreign persons buying established homes, running from 1 April 2025 to 31 March 2027. There was a review scheduled before it expires. This two‑year window is aimed at pushing foreign investment into new housing and freeing up existing homes for local buyers.

For expats, the key issue is whether you are treated as a “foreign person” under the rules. This generally includes non‑resident foreign buyers and many temporary visa holders but not Australian citizens. It also does not include most permanent residents living abroad. That residency line now determines whether expats can still buy established homes in Australia or need to pivot toward new properties instead.

How the ban impacts different expat types: Can expats still buy established homes in Australia?

Australian citizens living overseas can continue to buy established homes in Australia and are not subject to the foreign‑purchase ban.

Australian permanent residents based offshore are usually treated like residents for property purposes and can buy established dwellings. However they should double‑check any state‑based surcharges or definitions that might classify them differently.ato+1

Non‑resident foreign expats (for example, UK or US citizens with no Australian PR) are now generally banned from buying established homes in Australia.

What expats can still buy (and finance) in 2025-2027

Even under the new regime, expats classified as foreign persons can usually still buy:

New dwellings, including off‑the‑plan apartments or house‑and‑land packages, subject to FIRB approval and higher application fees.
Vacant residential land, provided substantial construction starts within four years of settlement, again with FIRB approval and close monitoring

More Government policy changes affecting expat mortgages in 2025

Stricter Debt-to-Income Ratio Rules Impacting Borrowers in 2025

The Australian Prudential Regulation Authority (APRA) activated new debt-to-income (DTI) lending limits in late 2025 to curb housing risks, effective from February 2026. This allowed banks to offer just 20% of new mortgages at a DTI of 6 or higher. DTI calculates total debts (including the new loan) divided by gross annual income—a $100,000 earner seeking over $600,000 in total debt hits that threshold. These caps apply separately to owner-occupier and investor loans, pushing lenders to favour lower-DTI borrowers amid high household debt levels.

For expats and all borrowers, this means tighter scrutiny on income stability, existing debts, and serviceability, with major banks like ANZ capping at DTI 9, CommBank reviewing above 7, and others following suit. HECS/HELP debts were excluded from some DTI calculations starting February 2025, easing access for graduates, but foreign income still faces conservative assessments.

How DTI changes hit expat and general borrowers

High-DTI applicants (6+) face limits, reducing borrowing power—e.g., a $150,000-income couple might drop from $900,000 to less with debts or expenses.
Expats need robust foreign-income proof, as lenders shade it for volatility, combining with FIRB rules for double hurdles.

Where to check the Government policy changes affecting expat mortgages before you buy

Verify details with trusted sources before committing:

Next steps: Act now to secure your property goals

If you’re an Australian expat wondering “Can I still buy an established home in Australia?”, the answer depends on your residency. Confirm your status and understand the new lending and investment rules. In addition, use Ratebuster to compare expat-friendly home loan rates, fees, and features. Access tailored guides and tools to negotiate 2025’s regulatory landscape swiftly and confidently before these policies evolve further.