Surcharges when Foreigner is Buying Property in NSW

Foreign Purchasers of Australian property.

When foreigners purchase property in NSW, they are subject to surcharges in addition to the normal duty payable on property purchases.

These surcharges do not apply to Australian citizens.

They do apply to foreign persons, including foreign individuals, corporations, trusts and governments.

What is a Foreign Person?

Basically a Foreign  person is a person that is NOT an Australian citizen, and is not ordinarily resident in Australia.

A Permanent Resident visa holder, or a Partner visa holder (subclasses 309, 820, 100 or 801), or a New Zealand citizen with a subclass 444 visa, are NOT classed as ‘foreign persons’, if they have spent at least the last 200 days in Australia.

Revenue NSW states the following:

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• A ‘foreign person’ for the purposes of surcharges on property purchases in NSW is an individual who is not ordinarily resident in Australia. (5)
  Note: Section 104J deems an Australian citizen to be ordinarily resident in Australia, whether they are physically or not. (7)

• An individual is taken to be ordinarily resident in Australia if that person has actually been in Australia during 200 or more days of the preceding 12 month period, AND their stay in Australia is not subject to any limitation as to time imposed by law. (10) This means that a temporary visa holder, who must leave by a certain date, is considered a ‘foreign person’. (13, 14)

• A Permanent Resident, or the holder of a Partner (Provisional) visa (subclass 309 or 820), is NOT subject to a time limit, and is only classified as a foreign person if the person has not been in Australia during 200 or more days of the preceding 12 month period.

Source: www.revenue.nsw.gov.au

Surcharges for Foreign Buyers.

Foreign persons who buy or own residential land in NSW must pay a foreign surcharge on that property.

There are two surcharges.

1. Surcharge Purchaser Duty: A surcharge of 8% in addition to normal transfer duty.
2. Surcharge Land Tax: An annual surcharge on the taxable value of all the residential land you own, in addition to any land tax.

www.revenue.nsw.gov.au/…/foreign-buyers-and-land-owners

Rules for States other than NSW may be different.

At the current time, the Northern Territory does not apply a surcharge for stamp duty or land tax.

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