Protect Yourself as a Foreign Buyer in Australia

Are you an overseas investor buying property off plan in Australia?  Here’s how to make sure your deposit is protected and how to check that your property comes with insurance and warranties.   Make sure you’re aware of the loopholes that could you leave unprotected as a foreigner.

The level of protection you have as an investor varies between countries and developments.  Generally, you’ll find that less developed markets (places such as Vietnam, Indonesia and Thailand) have less protection for investors. 

What needs protecting:

  1. Your deposit – how to you make sure your deposit is protected if the developer gets into financial trouble?
  2. Insurance and building warranties – what happens if something goes wrong with the building after you have completed?

Deposit protection, cooling-off periods and buildings insurance are used to protect purchasers in Australia.  But the level of protection varies from state to state.  

Foreign Investors Guide to Australia


Deposit protection is largely consistent across the States of Australia. 

In most states any deposit paid by a purchaser for a property is held in a Trust Account by either a solicitor or an estate agent. In some states these funds can be released to the developer (or vendor) but only with the agreement of the purchaser.   Make sure you check your contract.

The only exception to this is in NSW where, by law effective 1 December 2019 deposits and any other instalments must be held by a stakeholder (usually the real estate agent) in a trust or controlled money account during the contract period.  The money cannot be released to the vendor before settlement, meaning the deposit and instalment monies are protected in the event of the developer’s insolvency.  These new restrictions do not prevent purchasers using a bank guarantee or deposit bond in lieu of a cash deposit.


Australia unlike many other countries, some states in Australia have a ‘Cooling-Off’ period for real estate contracts, which is a period of time when buying a property either the buyer or seller can back out of a contract.

Once the buyer and seller have exchanged contracts and paid a deposit on the property, the cooling off period begins. At any point during the cooling-off period either party can get out of the contract by providing written notice. However, if the buyer pulls out of the contract, they will not get their whole deposit back in some states and territories and in some states there is no cooling off period. (There is no cooling-off period for sales at auction).

There are various process that must be followed and the length of the cooling off period and the amount which is forfeited if the buyers withdraws from the sale, is dependant on the state in which the property is purchased. 

Waiving the cooling off period might make your offer more attractive to the seller; however, you should exercise caution before doing so. Be sure that your conveyancer has already done all the necessary inspections and due diligence. You should also make sure that you are comfortable with your ability to pay for the property either with cash of a mortgage. 

Read more about cooling off periods in our Buyer’s Guide to Australia for more details, just email [email protected] for your copy.


Each of the Australian states has different insurance and building warranties for new build developments. Investors buying property in Australia need to be aware that the protections in place to protect purchasers are not as strong as those in New Zealand or the United Kingdom. 

In many states you will find that buildings over three storey’s are not covered by insurance or building warranties.  Therefore you must ensure you have undertaken adequate due diligence to ensure you are comfortable to proceed with the purchase.

Buyers in New South Wales do have slightly greater protection than other states. In 2018, the New South Wales (NSW) Government introduced the Strata Building Bond and Inspections Scheme (the Scheme).  The Scheme is a way to rectify defective building work early in the life of new high-rise strata buildings.


Whilst not a ‘protection’ we mention delayed completion and sunset clauses here, as it’s something that offshore buyers should be aware of.

Over recent years, purchasers of off plan property have raised concerns that some developers have deliberately postponed the completion of construction work in order to cancel signed contracts by exercising the sunset clause, to then re -sell the property at a higher price.  

Many states (including NSW and Victoria) now have protection in place for buyers that require a developer to apply to the courts to do this, or the purchaser’s permission before they are able to terminate a contract using the sunset clause.  

Don’t forget, when you’re investing in overseas properties you must consider the factors that will impact the performance of your investment. 

Property investment is complex and multiple factors dictate whether a property is a good is investment.   Before making a commitment to purchase any property, be sure to run financial models so you have a really clear understanding of the likely performance of your property.    

We hope you found this article useful, read in conjunction with our other articles on investing in Australia and this should give you an understanding of the market and why we believe there is an opportunity to invest.  We’ve produced articles not just for Australia, but also New Zealand and the UK, so make sure you take the time to consider all your options and make sure your investment is right for you. Read more here.

Important notice:  Proptech Pioneer and its associated companies seeks to provide investors with guides, information and tools, but we cannot guarantee this information to be accurate or perfect.  You use the information at your own risk and accept no liability if you rely on this information.   Proptech Pioneer is not a tax advisor, conveyance, lawyer, financial advisor or mortgage advisor.  You should seek independent advice from independent professionals before making any investment decision