Australian citizens and persons who are ordinarily resident in Australia are not considered foreign persons and will not be liable to pay Surcharge Purchaser Duty (SPD).

Foreign persons may be eligible to opt into property tax provided they have met the eligibility criteria at the time the application is made and are a permanent resident in Australia or are acquiring the property together with an eligible purchaser/transferee who is an Australian citizen or permanent resident.

However, regardless of their ability to opt in, any purchasers/transferees deemed foreign persons under Chapter 2A of the Duties Act 1997, will be liable for surcharge purchaser duty on the percentage interest they are acquiring subject to the availability of any exemption or concession under the Duties Act 1997.

Any equity partners deemed to be foreign persons will be liable to pay surcharge purchaser duty in addition to transfer duty based on their percentage interest in the property they are acquiring.

Refer to the Surcharge Purchaser Duty guide for comprehensive information about surcharge purchaser duty.

Calculating surcharge purchaser duty when opting into property tax

A liability for SPD arises when an instrument is first executed or a transfer of dutiable property occurs and is calculated on the dutiable value (the greater of the purchase price or value). SPD must be paid within 3 months from the date of execution or upon settlement/transfer of the property, whichever occurs first.

How to submit an application involving foreign persons

Due to the complex nature of transactions involving foreign persons and First Home buyer Choice, an application for assessment must be submitted in eDuties using application type “First Home Buyer Choice - Assessment Application”.

To avoid delays, ensure all relevant evidentiary requirements, proof of identity documents and forms are submitted in eDuties at the time of application.

Helpful information

Exempt permanent resident and retirement visa holders

Care should be taken when determining an individual’s SPD liability and eligibility to opt into property tax. For exempt permanent residents and retirement visa holders, there are 2 different periods of time under residence requirements for SPD and property tax.

1. For SPD, the eligible purchaser/transferee must use and occupy the property as their principal place of residence for 200 continuous days within the first 12 months after the liability date.
2. When opting into property tax, the eligible purchaser/transferee must reside in the property for 6 months starting within the period of 12 months after the land is transferred.

The eligible purchaser/transferee will be liable for SPD if they do not meet the residence requirement for an exempt permanent resident or as a retirement visa holder.

Refer to the Surcharge Purchaser Duty guide for more detailed information.

Surcharge land tax

Foreign persons who have opted into the annual property tax may also be liable for Surcharge land tax (SLT), which is also calculated and applied yearly.

Similar to SPD, there are different time periods under the residence requirement for SLT and property tax.

For more information regarding SLT, refer to the foreign owner surcharge webpage or contact us.