Recent Changes in NSW – Stamp Duty for Foreign Persons

If you are not an Australian citizen or ordinarily resident in Australia, you may be liable for additional stamp duty on any purchase of residential property in NSW, referred to as “Surcharge Purchaser Duty”.

Surcharge Purchaser Duty is currently calculated as 8% of the purchase price of a residential property in addition to transfer duty that is already payable. As such, if you purchase a $1,000,000 residential property in NSW as a foreign person, an additional $80,000 in transfer duty is payable as follows:

TYPE OF DUTY	AMOUNT $AUD
Transfer Duty	$39,569.00
Surcharge Purchaser Duty	$80,000.00
TOTAL DUTY	$119,569.00

Changes from 8 April 2024

Prior to 8 April 2024, it was identified that citizens of New Zealand, Finland, Germany, India, Japan, Norway, South Africa and Switzerland were not subject to Surcharge Purchaser Duty due to international tax treaties. On and from 8 April 2024, citizens of these counties no longer meet this exemption and may be required to pay Surcharge Purchaser Duty on any purchase of residential property.

Revenue NSW has provided guidance on whether a purchaser is deemed to be a foreign person for stamp duty purposes. According to Revenue NSW, you are not a foreign person if you are:

• An Australian Citizen;
• Ordinarily resident in Australia; or
• A New Zealand citizen who holds a special category visa who meets the 200-day test below.

You are deemed to be ordinarily resident in Australia if you have been physically present in the country for 200 or more days in the period of 12 months immediately preceding the date of the agreement for your purchase and were not subject to any limitation as to your continued presence in Australia.

Revenue NSW has published the following table providing guidance to purchasers on what visa types deem you to be a foreign person for stamp duty purposes.

 

Visa Type	Meet 200-day rule	Foreign Person	Liable to 8% Surcharge
Permanent resident	Yes	No	No
New Zealand citizen holding special category visa (onshore)	Yes	No	No
Partner (309 & 820)	Yes	No	No
Retirement (405 & 410)	Seek further advice	Yes	No
Work	N/A	Yes	Yes
Temporary entry	N/A	Yes	Yes
Visitor	N/A	Yes	Yes
Bridging	N/A	Yes	Yes
Business	N/A	Yes	Yes

 

As noted above, a bridging Visa means you will be liable to Surcharge Purchaser Duty on any purchases of residential property. If you have any concerns that you may be a foreign person, it is imperative that you seek legal advice to ensure that any stamp duty implications are addressed prior to your purchase.

*This article was prepared with the assistance of Jack Harman