Bathurst Blog

As a consequence of budget changes in NSW in 2016 and of recent announcements regarding state land tax, the purchase of residential real estate will be more costly for foreigners.

The 2016 budget introduced a 4% surcharge on stamp duty payable by foreign persons on the purchase of residential property in the state. This is in addition to normal stamp duty which will continue to be payable at normal rates. In addition, the 12-month delay concession on off-the-plan purchases will not be available to foreign buyers. Such a purchaser, buying for $1m, would pay $40,490 initial duty plus $40,000 surcharge.

Recently announced, and operating for the 2017 land tax year, is a 0.75% surcharge on the land tax levied on foreign persons, nor will any residential concessions or other exemptions apply to them. The surcharge is calculated on the value of the land.

In both cases, foreign ownership has been defined to include foreigners living overseas or living in Australia without residency rights. It includes foreign companies, trusts, and other ownerships. However there is a range of exemptions, such as New Zealanders, so it is anyone who thinks they might be affected should seek competent legal or accounting advice on the matter.

The two additional state tax surcharges do not apply to Australian citizens living abroad, or foreign-born persons who have permanent Australian residency.

If you have a real estate matter in mind, whether a sale, purchase, property management or a letting, we at Raine & Horne Bathurst can expertly assist you. Contact us or call into our office to discuss.