Buying in Sydney vs back home: what Americans really pay

In Sydney, the first question isn't the price. It's your visa, because most Americans here count as foreign buyers.

The short version

• On a temporary visa, you're a "foreign person." Since April 1, 2025, foreign persons, including temporary residents, are temporarily banned from buying established homes unless an exception applies [1]. New homes still need Foreign Investment Review Board (FIRB) approval.
• Foreign buyers in NSW pay 9% surcharge purchaser duty on top of normal transfer duty, plus a 5% surcharge land tax every year [2][3].
• Permanent residents are treated far better. A PR who has spent 200 days in Australia in the past year, or who lives in the home, generally escapes the NSW surcharges [2].
• The IRS taxes your worldwide gain. Section 121 shelters up to USD 250,000 (USD 500,000 joint), and Australian tax on the sale counts toward the foreign tax credit [5][6].
• Leave Australia before you sell and the Australian main residence exemption usually disappears [7].

USD conversions use the Federal Reserve H.10 rate of October 30, 2026 (USD 0.7038 per Australian dollar), rounded.

Can Americans buy in Sydney?

It depends almost entirely on your visa:

The FIRB ban started on April 1, 2025, and now runs to June 30, 2029 [1][11]. If you're on a 482 or similar visa, assume you can't buy that Federation cottage in Marrickville until either the ban lifts or you get PR. Buying jointly with an Australian citizen spouse can change the picture, so check FIRB guidance before you bid.

A few things feel different from a closing back home. Many Sydney homes sell at auction, with no cooling-off period once the hammer falls. A conveyancer or solicitor handles the contract and settlement, and there's no title insurance culture in the American sense. Strata buildings (condos) come with levies and a strata report worth reading carefully.

Getting a loan: Australian lender or US lender?

In Sydney. Australian banks lend to temporary residents, but expect tighter terms: a bigger deposit, fewer lenders and closer questions about how long your visa runs. PR holders get close to local terms. If your partner is Australian and you're applying together, our sister site ExpatCooee explains how Australian lenders assess foreign income, which matters if part of your household pay comes from the States.

Back home. Borrowing against a US home and paying cash in Sydney is the other route. Our guide to US mortgages for Americans living abroad covers what US lenders want from someone earning abroad.

The currency trap. The IRS measures an Aussie dollar mortgage in US dollars. If the Australian dollar weakens while you owe it, paying the loan off can create a taxable US currency gain even though you repaid exactly what you borrowed. Our guide to currency gains on a foreign mortgage explains the trap.

Costs side by side

Rates as of November 2026, NSW transfer duty for the 2026–27 rate year [4].

A worked example

Illustration only. A new A$1,200,000 two-bedroom apartment (about USD 844,600) bought in NSW:

The duty math: A$11,602 plus 4.5% of A$813,000 [4]. The surcharge is 9% of the full price [2][3]. Add a FIRB fee for the temporary resident, plus 5% of the land value every year in surcharge land tax. Same apartment, roughly three times the upfront tax.

Tax when you sell

The Australian side

If you're an Australian tax resident when you sell your home, the main residence exemption usually removes the gain from Australian tax. But if you're a foreign resident for tax purposes at the time of sale, you generally can't claim it at all, even for years you lived there. The only way out is the narrow life events test: six years or less as a foreign resident, plus a terminal illness, a death in the family or a divorce [7].

Every Australian property sale also comes with withholding. Since January 1, 2025, the buyer must withhold 15% of the price unless the seller hands over an ATO clearance certificate at or before settlement, and only Australian residents can get one [8].

The US side

Uncle Sam taxes your worldwide gain, measured in dollars:

1. Section 121 works for a foreign home. Own the place and live in it for at least 24 months of the 5 years before the sale, and up to USD 250,000 of gain (USD 500,000 for most joint filers) is excluded [5]. Nothing limits it to US homes.
2. Above the cap, you're exposed. Sydney prices are steep. If Australia exempts the sale, there's no Australian tax to credit against US tax on gains above the exclusion.
3. The foreign tax credit. When Australia does tax the sale (an investment property, or your home after you've left), that tax goes on Form 1116 against US tax on the same gain [6]. Stamp duty and land tax aren't income taxes and don't count.
4. Currency counts. Dollar cost at the purchase-date rate, dollar proceeds at the sale-date rate.

Your old place in Los Angeles

The 2-of-5-years clock keeps running. More than three years away and the exclusion is usually gone; depreciation from renting it out is taxed on sale either way, and California taxes nonresidents on gains from California property. Our guide to selling your US home after moving abroad has the details.

Renting it out

The Australian side. Rent is taxable Australian income, with deductions for interest, strata levies, council rates and capital works. Foreign owners of residential land also pay the NSW surcharge land tax every year [3], so a rental can be pricier to hold than a local investor's.

The US side. Report the rent on Schedule E. A Sydney home is used predominantly outside the United States, so you depreciate it under the Alternative Depreciation System over 30 years, not the 27.5 years you'd use for a rental in Pasadena [9][10]. Australian income tax on the rent can go on Form 1116.

Renting out the place back home instead? Our guide to rental income from a US property covers the stateside rules.

Which makes sense for whom

• Staying long term with PR. Buying in Sydney can make sense once you have PR: no surcharges, and both the Australian exemption and Section 121 are in reach.
• Retiring in Australia. Australia has no retirement visa for new applicants, so the purchase usually follows PR through family or work. Plan your estate on both sides.
• Moving back in a few years. Rent in Sydney and keep (or buy) stateside. A temporary resident pays the surcharges going in and loses the main residence exemption going out.
• On a temporary visa and set on buying. Run the full numbers: duty, 9% surcharge, FIRB fee, annual 5% land tax, and the tax hit if you sell after leaving.

A US expat tax preparer (or an Australian lawyer) can check your situation before you sign.

Sources

1. Changes to foreign purchases of established dwellings – Foreign Investment Review Board
2. Surcharge purchaser duty for individuals – Revenue NSW
3. 2024–2025 NSW State Budget – Revenue NSW
4. How to calculate transfer duty – Revenue NSW
5. Topic no. 701, Sale of your home – IRS
6. Foreign tax credit – IRS
7. Main residence exemption for foreign residents – Australian Taxation Office
8. Foreign resident capital gains withholding overview – Australian Taxation Office
9. Publication 527, Residential rental property (2025) – IRS
10. 26 U.S. Code § 168, alternative depreciation system – Cornell Law School LII
11. Fees for foreign residential investors – Australian Taxation Office

Keep reading

• Buying property in Australia as an American: FIRB rules
• Australian taxes for Americans: how they fit with your US return
• Renting in Sydney
• Keeping or renting out your US home after you move abroad