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Stamp duty surcharges for foreign investors
Posted by Northadvisory on July 25, 2018
All states in Australia have (or will) implemented surcharges on foreign investors in the residential property market.
The following is a state-by-state breakdown for foreign purchasers, including the specific definitions and exclusions which apply in each jurisdiction.
New South Wales
Stamp duty surcharge |
8% |
Affected persons |
Individual must be in Australia for 200 days or more within |
Other provisions affected |
No longer entitled to the 12 month deferral for the payment of |
Other notes for NSW:
A corporation and a trustee of a trust can be a foreign person. This will occur where the corporation or trust itself is not resident in Australia, or an Australian company which has a substantial foreign company or individual ownership.
A substantial interest of a corporation means an ownership or control of at least 20 percent. For trusts, if the minimum possible distribution is over 20 percent the trust is deemed a foreign person also.
If a trustee has a discretionary power to make a distribution for a foreign person, then they are deemed to have a 100% beneficial ownership.
A trust deed under this scenario must be amended with 6 months of the exemption being granted (ie. contract date) in order for the surcharge to be avoided.
Victoria
Stamp duty surcharge |
7% |
Affected persons |
Persons who are not a: |
Other provisions affected |
First home buyer concession of duty not available for foreign |
Other notes for Victoria:
A foreign purchaser may be entitled to an exemption from additional duty if they purchase a principal place of residence jointly with a spouse who is an Australian citizen, permanent resident or NZ citizen with a special category visa.
Controlling interest in corporations refers to a 50 percent control in the company by way of shares or voting rights.
Beneficial interest in trusts refers to a 50 percent beneficial interest in the capital of the trust, or if the maximum percentage of discretionary beneficial entitlement is greater than 50 percent.
A foreign purchaser may still be entitled to a concession of general stamp duty where they are purchasing their principal place of residence. However, the foreign purchaser duty may apply.
Queensland
Stamp duty surcharge |
7% |
Affected persons |
Persons who are not a: |
Other provisions affected |
Additional stamp duty applies to: |
Other notes for Queensland:
Purchases of other types of residential property such as retirement villages and student accommodation are considered on a case-by-case basis.
A foreign purchaser can still claim the first home concession, first home vacant land concession and home concession.
South Australia
Stamp duty surcharge |
7% |
Affected persons |
Persons who are not a: |
Other notes for South Australia:
A foreign person is entitled to a refund of the surcharge duty where they cease to be a foreign person as defined above within 12 months of acquisition.
The surcharge will be retrospectively imposed where a person, corporation or trust becomes a foreign person, corporation or trust within three years of the acquisition.
Western Australia
Stamp duty surcharge |
4% |
Affected persons |
Foreigners, including individuals, corporations and trusts. |
Other notes for Western Australia:
The foreign purchaser surcharge will not apply to residential developments of 10 or more properties.
Tasmania
Stamp duty surcharge |
3% |
Affected persons |
Foreign natural person |
Other provisions affected |
Additional 0.5% on the proportion of dutiable value of primary |
Other notes for Tasmania:
A corporation or trust acquiring residential or primary production property will be required to satisfy its TRO agent that it is not a foreigner in order to avoid imposition of the additional duty.
The additional duty is not payable if the underlying transaction is exempt or is eligible for a concession. The main general concession is for companies undergoing a statutory wind-up.
If you have questions on any of the above issues raised, please do not hesitate to contact us.
Kim Edwards
Chartered Tax Adviser
Chartered Accountant
T: 02 9984 7774
E: kime@northadvisory.com.au