Investing in Australian Property as an Expat
Reviewed and updated June 2026
This guide reflects the position as at June 2026, including current ABS population figures, the post-2017 limits on property depreciation, and the 2026-27 Federal Budget changes restricting negative gearing to new builds from 1 July 2027. It also factors in the foreign purchaser surcharges that apply to overseas buyers. Property and tax rules change often, so confirm the current position before investing.
Investing in Australian Property as an Expat: The Honest Case (and the Myths to Ignore)
If you’ve spent any time around property, you’ve heard the pitch. “Bricks and mortar never lose!” “It doubles every seven to ten years!” “Negative gearing is free money!” Usually delivered by someone with a glossy brochure and a suspiciously strong interest in you signing today.
Here’s the thing: Australian property genuinely can be a sound investment. But the breathless sales pitch oversells it, and a couple of the old “benefits” have been quietly clipped by recent law changes. So let’s do this properly: the real reasons Australian property appeals to expat investors, with the spruiker myths stripped out, so you can decide with clear eyes.
1. The population keeps growing
This one’s real. Australia’s population was around 27.7 million in late 2025 and is growing at roughly 1.6% a year, heavily driven by overseas migration. The Australian Bureau of Statistics projects the country will pass 30 million within the next decade or so. More people need more roofs, and the number of households is projected to climb from around 10 million in 2021 to between 13.3 and 13.9 million by 2046.
Growing demand for housing is a genuine long-term tailwind for property. Just don’t mistake a tailwind for a guarantee; population growth supports the market broadly, but it doesn’t mean every property in every town goes up.
2. People want to live where the jobs and lifestyle are
Australia is one of the most urbanised countries on earth, with the overwhelming majority of people clustered in and around a handful of major cities. As households grow and cities densify, well-located property (close to employment, transport and amenity) tends to hold demand better than property on the distant fringe.
That’s a more honest version of the old “buy near the CBD and you can’t lose” line. Location genuinely matters, but “well-located” is doing the heavy lifting, not the postcode prestige. A overpriced shoebox near the city can be a worse buy than a sensible home in a growing outer suburb. The skill is in the selection, not the slogan.
3. Long-term growth, with a giant asterisk
Here’s where I’ll part company with the brochure. Yes, Australian residential property has delivered strong long-term growth over past decades. No, it does not reliably “double every 7 to 10 years,” and anyone who states that as a law of nature is selling something. Past growth was supercharged by a multi-decade fall in interest rates and rising household debt, tailwinds that can’t simply repeat indefinitely.
Property can be a solid growth asset over the long haul, especially with the leverage a mortgage provides (which magnifies gains, and losses). But treat “7% forever, doubles every decade” as marketing, not maths. Run conservative numbers, factor in all the costs (rates, insurance, maintenance, management, and for expats the surcharges below), and make sure the investment stacks up even if growth is modest. If it only works on heroic growth assumptions, it doesn’t work.
4. Depreciation (within the post-2017 limits)
Depreciation lets you claim the declining value of a building and its fittings as a deduction, without spending fresh cash each year. It’s a real benefit, but a narrower one than it used to be. Since changes that took effect in 2017, investors generally can’t claim depreciation on the second-hand plant and equipment (the used appliances, carpets and the like) that come with an established home. You can still claim the building’s capital works, and depreciation on brand new assets you install yourself or that come with a new property.
So depreciation still helps, particularly on newer properties, but the “maximise your depreciation” pitch needs a 2026 reality check. We’ve laid out exactly what you can and can’t claim in our guide to rental property deductions for expats.
5. Negative gearing (read this before you bank on it)
For decades, negative gearing was the headline tax drawcard: run your rental at a loss and offset that loss against your other income. But this is the one that’s changed most, and the old pitch is now out of date.
Under the 2026-27 Federal Budget, negative gearing on residential property is being restricted to new builds from 1 July 2027. Properties held before 7:30pm AEST on 12 May 2026 are grandfathered and can keep the old treatment, but for a property caught by the new rules, a rental loss is quarantined (usable only against future residential rental income or capital gains) rather than reducing your salary or other income. For expats, who often own a single Australian property and little else here, those quarantined losses can end up stranded. We’ve broken this down in detail in our 2026 Budget guide for expats.
The honest takeaway: negative gearing is no longer the reliable, universal sweetener it once was, so don’t build your investment case on it. If a property only makes sense because of the tax break, it probably doesn’t make sense.
The expat-specific catches the brochures skip
And here’s what the “invest in Aussie property!” pitches almost never mention to overseas buyers. As a foreign person (which can include Australian permanent residents and visa holders living abroad), you may face a stamp duty surcharge of 7% to 9% depending on the state, plus an annual land tax surcharge in several states, every year you hold. We’ve covered these in our pieces on the NSW stamp duty surcharge and the land tax surcharges in Victoria and NSW.
On top of that, when you eventually sell as a non-resident, you generally lose the main residence CGT exemption and face a 15% withholding on the sale price. None of this makes Australian property a bad investment, but it absolutely changes the numbers, and any honest case has to include the full cost of being a foreign owner, not just the upside.
The bottom line
The genuine case for Australian property is real: steady population growth, strong demand for well-located housing, and a long track record of growth, with the leverage a mortgage provides. But strip out the spruiker myths (no, it doesn’t double every decade like clockwork), respect that the depreciation and negative gearing benefits have been clipped, and price in the surcharges and CGT rules that hit foreign owners specifically. Do that, and you can make a genuinely informed decision instead of an emotional one.
Tread your own path. Just make sure the numbers work without the fairytale growth.
Thinking about Australian property from overseas? Get the real numbers first.
The difference between a good property investment and an expensive mistake usually comes down to the numbers nobody put in the brochure: the surcharges, the changed negative gearing rules, the depreciation limits, and the CGT bill waiting when you sell as a non-resident. Run those properly up front and you invest with confidence; ignore them and you find out the hard way.
Our specialist expatriate tax team helps Aussies overseas weigh up the full tax picture of investing in Australian property, working remotely with clients all over the world.
Book an appointment with our expat tax specialists today, ideally before you commit to a purchase. Your future self, and your hip pocket, will thank you.
General information only. This article doesn’t consider your personal circumstances and isn’t tax, financial or investment advice. Property investment carries risk, including the risk of loss, and tax rules change frequently. Speak to our specialist expatriate tax team today, or with another registered tax agent and a licensed financial adviser, before acting.
References
- Australian Bureau of Statistics, “Population” (Australia’s population of approximately 27.7 million at September 2025 and 1.6% annual growth): abs.gov.au
- Australian Bureau of Statistics, “Population Projections, Australia, 2022 (base) – 2071” (projection that Australia reaches around 30 million within the next decade): abs.gov.au
- Australian Bureau of Statistics, “Household and Family Projections, Australia” (households projected to rise from 10.0 million in 2021 to between 13.3 and 13.9 million by 2046): abs.gov.au
- Australian Taxation Office, “Second-hand depreciating assets” (the 2017 limits on depreciation for used assets in residential rental properties): ato.gov.au
- Australian Government, Budget 2026-27, “Negative Gearing and Capital Gains Tax Reform” fact sheet (negative gearing restricted to new builds from 1 July 2027, with grandfathering from 12 May 2026): budget.gov.au
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