Purchaser Declarations and Foreign Person Surcharge

May 4, 2022

By Property Law Team

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Foreign Purchaser Land Tax Surcharge

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On 18 July, 2018, it was introduced that when purchasing property in NSW purchasers are required to complete a Purchaser Declaration. This declaration is submitted to Revenue NSW when the Contract is lodged for stamping. If there is more than one purchaser, each purchaser must individually complete the declaration.

The declaration enables the Office of State Revenue (OSR) to determine if the purchaser is a foreign person and liable to pay the 4% surcharge duty and land tax liabilities, and also to maintain records on property transactions in NSW.

If you are a foreign person who owns residential land in NSW, you must pay surcharge land tax in addition to any land tax you may already pay. You may be required to pay surcharge even if you do not pay land tax.

You’re generally considered a foreign person, unless:

  • you’re an Australian citizen; or
  • you’ve lived in Australia for 200 days or more in the 12 months prior to the taxing date of 31 December, and you’re:
    • a permanent resident of Australia, or
    • a New Zealand Citizen, who holds a subclass 444 visa.

You must pay a surcharge on the taxable value of all residential land that you own as at 31 December each year. There is no tax-free threshold applicable to the surcharge.

principal place of residence exemption may apply to purchasers from the 2018 tax year. It applies for one year and one residential property. Residency requirements must be met.

It is important that the details on the Purchaser Declaration are correctly answered as this will affect the stamp duty assessment and whether a surcharge is applicable.

In addition to the Purchaser Declaration, a verification of identity of each purchaser must be carried out and copies of the identity documents also submitted with the Purchaser Declaration at the time of stamping.

If the purchaser is not an Australian Citizen, additional requirements apply.  Each non-Australian must also provide a copy of their Visa and apply to the Department of Home Affairs for an International Movement Report by completing a Form 1359.  This is to verify that they have been in the country for 200 days prior to entering into the Contract.  If not, this could also affect the stamp duty assessed.

For further information please download this PDF.

Important Disclaimer: The content of this article is general in nature and for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.

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