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One Property, Two Prices: What Rules Do Countries Set for Foreign Buyers?

One Property, Two Prices: What Rules Do Countries Set for Foreign Buyers?

In many countries around the world, it is common for local and foreign buyers to encounter different prices for the same property or to face differing conditions.

In many countries around the world, it is common for local and foreign buyers to encounter different prices for the same property or to face differing conditions. Approaches vary: in some jurisdictions, domestic laws impose strict restrictions on land ownership, cap the number of residential units available to non-residents, or levy high additional taxes. Elsewhere, there are no specific legal provisions for foreign buyers and prices are determined solely by market forces.

The rationale behind differentiated pricing policies is multifaceted. Often, governments seek either to stimulate the domestic market or to shield it from excessive pressure exerted by foreign capital. This article reviews a range of such practices.

Before turning to specific examples, it is worth asking a more general question: what drives housing prices upward when local incomes are not rising significantly? One factor is migration and growing interest from investors. Analytical reports note that in cities with a large number of migrants and foreign investors, property prices can rise far beyond the purchasing ability of local residents. Put simply, in cities with many foreign buyers, demand for real estate is high, and this demand pushes prices to levels that local incomes can no longer match. People begin to feel that homes are no longer being built for them. This is roughly the situation in Georgia as well, especially in Tbilisi, where the average price per square metre of an apartment is still lower than in many major cities of Eastern and South-Eastern Europe, which in turn increases foreign interest. This is not the only factor: apartment prices are also influenced by local income levels, supply shortages, mortgage conditions and, in some cases, the pace of construction.

In a number of countries where such a gap has emerged between local residents’ purchasing ability and rising property prices, different types of responses have been introduced. In some cases legislation has intervened; in others, the local market has partially adjusted; and in some places artificial barriers have been created for foreign buyers.

This gives rise to a frequently asked question: does this amount to protecting local residents, or to discriminating against foreign buyers? There is no simple answer, and both perspectives have their own set of arguments. However, examining how other countries have handled this issue can help us draw useful conclusions.

– Switzerland Lex Koller law: Strict federal rules controlling foreign ownership of residential and holiday property. Non-resident foreigners generally cannot buy ordinary residential property freely; they need permits and are often restricted to tourist zones. National quota of around 1,500 holiday homes per year for non-resident foreigners. Holiday homes must be in designated tourist communes, with a maximum living area of 200 m² and a land area of 1,000 m². Violation of the law entails strict sanctions, such as declaring a transaction null and void or imposing fines. These limits are a classic example of protecting local communities from foreign dominance.

– In Denmark, you must either have lived in Denmark 5+ years or get special permission from the Ministry of Justice to buy any property. Summer-house (holiday home) protection – even for EU citizens: foreigners, including many EU/EEA citizens, generally cannot buy Danish summer houses on the coast unless they have a strong personal connection and ministry approval. The aim is explicitly to protect rural and coastal areas from speculative foreign demand.

– In Canada, a federal law prohibiting non-Canadians from purchasing most types of residential real estate came into force in January 2023. It was initially adopted for a two-year period and has since been extended. The law includes several exemptions. Its stated aim is to make housing more affordable for local residents by reducing speculative, externally driven excess demand. Foreign owners are also subject to additional taxes on properties that are left vacant or underused.

– In New Zealand, a ban on the purchase of residential property by most foreign buyers was introduced in 2018 in response to a housing crisis. In 2025, however, the country allowed wealthy investors holding a so-called “golden visa” to buy or build one high-value residence.

– In Australia, from 1 April 2025 foreign buyers are permitted to purchase only newly built dwellings. The ban, set for two years, means that foreign investors and many temporary residents are prohibited from buying existing homes and may acquire only newly constructed properties or vacant land for development. Before purchasing residential property, foreigners must apply to the Foreign Investment Review Board (FIRB) and pay the relevant fee. There is also an annual charge if a dwelling is left vacant for more than six months of the year. In addition, most Australian states impose an extra stamp duty surcharge on foreign buyers, often in the range of 7–8%.

– In Singapore, foreign buyers must pay an additional 60% on top of existing taxes when purchasing residential property. Through this mechanism, the authorities seek to protect local residents from speculative price increases driven by excessive demand for housing.

– The United Kingdom also applies an additional tax surcharge to foreign or non-resident buyers.

– In 2025, the Spanish government put forward a proposal under which homes purchased by non-EU citizens could be subject to a tax of up to 100% of the purchase value. The aim is to curb foreign demand and address the housing affordability crisis, particularly in major cities and coastal tourist areas.

– In Sri Lanka, foreigners face restrictions on land ownership. The 2014 Land (Restrictions on Alienation) Act prohibits the transfer of freehold land to foreign individuals, foreign companies or companies with 50% or more foreign shareholding, except in specific exempted cases. Certain conditions also apply to the purchase of residential apartments.

– In Indonesia, foreigners do not have an unconditional right to freehold ownership of land. Various restrictions also apply to the purchase of apartments.

In some countries, when both a local and a foreign client are interested in the same property, they may be offered different starting prices or different discounts. There are clear reasons why foreign buyers are often quoted a higher price: they are less familiar with local price levels or, when they compare with prices in their own country, paying even 2,000 US dollars per square metre can still appear attractive. A July 2025 article titled “Why Property Prices in Costa Rica Vary by Buyer?” notes that realtors may set different prices for the same property depending on whether the buyer is local or foreign. It explains that this differentiated pricing is particularly visible in tourist towns, where the price effectively depends on the client. The local buyer receives the “local price”, while the foreigner is offered an “international tariff”. “But here’s the opportunity: negotiation is expected. It’s common to reduce a price by 20% or even 30%—especially if the property has been listed for a while. And yes, local buyers often get better deals than foreigners, simply because they know how the game is played,” the article observes.

Differentiated pricing practices are also reported in Cyprus and the Philippines.

In Turkey, the law is formally the same for everyone, but in practice some agents are reported to set different prices for foreign buyers. Foreign individuals can purchase most types of real estate in Turkey.

In the United States, the Fair Housing Act (FHA) of 1968 prohibits discrimination in housing in a variety of ways, including on the basis of national origin. This means that a landlord or real estate agent may not refuse to rent or sell to a foreign client, charge them a higher rent or deposit, or steer them towards or away from certain neighbourhoods because of their origin. In practice, however, informal double-pricing can still occur, because it is very difficult for a foreigner to prove in court that they were quoted a higher price because of their nationality.

In Georgia, foreign buyers do not pay any additional special tax when purchasing residential real estate, nor are there any significant specific restrictions at the moment of purchase. The rules for buying apartments and houses are practically the same as for Georgian citizens, and the annual property tax is also the same for foreigners as it is for locals. The restriction applies to plots of land with agricultural status. Foreigners can buy apartments, houses, commercial spaces and non-agricultural plots, but they cannot acquire agricultural land. With regard to pricing, individual agents may attempt to sell property to foreigners at a higher price, on the assumption that local buyers are better informed about market levels. However, the difference is usually not substantial, as it is relatively easy for a foreign buyer to research and understand local prices with a modest amount of effort.

The examples discussed show that many countries have introduced special rules to shield themselves from the impact of powerful flows of foreign capital. In some places these rules are very strict, in others relatively mild, but in all of these countries a fully open market created serious challenges for local residents. For a country like Georgia, this issue is particularly sensitive. Similar problems have already emerged here as well: many citizens now voice concern about the seemingly irreversible rise in housing prices. Social media is full of comments suggesting that, soon, there will be no Georgian buyers left in the market. At the same time, a developing economy derives substantial benefits from foreign investment, and closing the real estate market completely to foreigners would likely cause serious damage to the economy. This creates a dilemma between “protecting local residents” and “attracting investors”. In this context, it is essential to design rules that keep the door open for long-term, responsible investment while at the same time ensuring that housing remains both physically and financially accessible to local residents.

If you are considering investing in real estate in Georgia, Kedaro Group is ready to provide you with professional guidance.