For international buyer:
Under Australia’s foreign investment framework, foreign persons generally need to apply for foreign investment approval before purchasing residential real estate in Australia.
The Government’s policy is to channel foreign investment into new dwellings as this creates additional jobs in the construction industry and helps support economic growth. It can also increase government revenues, in the form of stamp duties and other taxes, and from the overall higher economic growth that flows from additional investment.
Foreign investment applications are therefore generally considered in light of the overarching principle that the proposed investment should increase Australia’s housing stock (be creating at least one new additional dwelling).
Consistent with this aim, different factors apply depending on whether the type of property being acquired will increase the housing stock or whether it is an established dwelling.
It is important that foreign investors understand and comply with Australia’s foreign investment framework as strict criminal and civil penalties may apply for breaches of the law, including disposal orders.
For more details, please visit Australian Government Foreign Investment Review Board website: https://firb.gov.au/real-estate/
Surcharge purchaser duty in NSW:
The 2016 NSW Budget introduced a 4 per cent surcharge purchaser duty on the purchase of residential real estate by foreign persons from 21 June 2016. As a result of the 2017 Budget, for agreements entered into on or after 1 July 2017the surcharge purchaser duty rate has increased from 4 per cent to 8 per cent. The surcharge is in addition to the duty payable on the purchase of residential property.
Foreign persons will no longer be entitled to the 12 month deferral for the payment of stamp duty for off-the-plan purchases of residential property.
This surcharge will also apply to landholder transactions if there is a landholder liability and one or more of the properties owned by the landholder is classified residential and the purchaser is a foreign person who purchases shares or units in the landholder.
The purchaser/transferee declaration must be completed when buying or acquiring land in NSW.
Permanent residents (including New Zealand citizens)
From 20 June 2017, permanent residents, including New Zealand citizens holding a Special Category visa (subclass 444), will be exempt from surcharge purchaser duty on their principal place of residence, if they occupy the home for a continuous period of 200 days within 12 months of purchase.
The exemption will be granted if the person declares that they will complete the 200 day residence requirement.
For instructions on how to process transaction through EDR, please refer to Interim Arrangement for Processing on EDR.
Land tax surcharge:
If you are a foreign person who owns residential land in NSW, you must pay a surcharge of 0.75 per cent for the 2017 land tax year and of two per cent from the 2018 land tax year onwards.
You may be a foreign person if you are not an Australian citizen.
A foreign person can be:
a trustee of a trust
a beneficiary of a land tax fixed trust
a government investor
a partner in a limited partnership.
You are required to pay the surcharge on the taxable value of all residential land that you own as at 31 December each year. A principal place of residence exemption may apply to you for 2018.
The surcharge is in addition to any land tax you may already pay. You may be required to pay the surcharge even if you do not pay land tax.
The surcharge is assessed in relation to each parcel of land, and is proportional to ownership. There are no joint assessments and secondary deductions do not apply. There is no tax-free threshold applicable to the surcharge.
For more details, please visit NSW Government Revenue website: