Renting out property in Australia: landlord guide

Costs of buying

• Stamp (transfer) duty is set by each state and territory, commonly around 3–5.5% of the price for a typical home.
• Most states add a foreign purchaser surcharge of about 7–9% of the price, and several charge foreign owners extra land tax every year.
• Foreign buyers also pay a FIRB application fee.

Buying as a foreigner

• Foreign persons need Foreign Investment Review Board (FIRB) approval, and can generally buy new homes, off-the-plan homes or vacant land to build on.
• From 1 April 2025 to 31 March 2027, foreign persons (including temporary residents) are banned from buying established homes, with limited exceptions.
• A yearly vacancy fee applies if a foreign-owned home is not lived in or genuinely available to rent for at least six months of the year.

Official guidance: Foreign Investment Review Board (foreigninvestment.gov.au) · ATO: Ban on foreign purchases of established dwellings

How rental income is taxed

• Rent is assessable income taxed at your marginal rate. Residents also pay the 2% Medicare levy; foreign residents pay 30% from the first dollar.
• The tax year runs from 1 July to 30 June. Returns lodged yourself are due by 31 October; tax agents can lodge later.
• A rental loss (negative gearing) reduces your other taxable income.
• When a foreign resident sells, the buyer withholds 15% of the price for the ATO unless a clearance applies.

Expenses claimable against rental income

• Loan interest, council rates, land tax and strata levies.
• Landlord insurance, repairs and maintenance, and property management fees.
• Advertising for tenants.
• Depreciation: the building (capital works) over 40 years, and fittings in a new property.
• Travel to inspect a residential rental is not claimable.

Tenancy rules

• Tenancy law is set by each state and territory.
• The bond, commonly four weeks' rent, is lodged with the state bond authority (in New South Wales, within 10 working days).
• Most states allow rent increases only once every 12 months, with written notice.

Key dates

• 30 June: Tax year ends
• 31 October: Tax return if you lodge it yourself
• Set by your state: Land tax assessment, and the foreign owner surcharge where it applies
• Yearly, for foreign owners: Vacancy fee return

Questions landlords ask

What is a good rental yield in Australia?

Gross yields of 3–4% are common for houses in Sydney and Melbourne, and 4–6% for units and in smaller cities. Check the cash flow with the loan in the rental yield calculator for Australia.

Can foreigners buy property in Australia?

Yes, with FIRB approval, mainly new homes, off-the-plan homes or vacant land. Buying established homes is banned for foreign persons from 1 April 2025 to 31 March 2027.

How is Australian rent taxed for a foreign resident?

Foreign residents pay 30% from the first dollar of taxable income and don't pay the Medicare levy. Expenses are claimable against the rent in the same way as for residents.

Which expenses can I claim against rental income in Australia?

Interest, council rates, land tax, strata levies, insurance, repairs, management fees, advertising and depreciation. Travel to a residential rental is not claimable.

Official sources

• ATO: Rental properties
• Foreign Investment Review Board (foreigninvestment.gov.au)
• ATO: Ban on foreign purchases of established dwellings