Foreign persons who acquire residential-related property in NSW must pay a foreign surcharge on that property.
What is Surcharge Purchaser Duty?
Surcharge Purchaser Duty came into effect on 21 June 2016. It applies to acquisitions of NSW residential-related property by those deemed to be foreign persons.
The surcharge is calculated on the dutiable value and is paid in addition to the transfer duty payable on the acquisition of residential-related property.
Who is a foreign person?
Individuals, corporations, trusts, and governments can all be foreign persons for the purposes of Surcharge Purchaser Duty.
Information provided in the chapters on the left hand side of this Guide, outlines the potential Surcharge Purchaser Duty liability for each.
What is residential-related property?
Section 104K of the Duties Act 1997 defines residential-related property.
Residential-related property includes:
- residential land as defined under section 104I of the Duties Act 1997
- an interest in residential-related property
- an option to purchase residential land in NSW
- a partnership interest (being an interest in a partnership that has partnership property that is residential-related property
Residential land includes any of the following:
Description | Definition |
|---|
Parcel of land | Where there are one or more dwellings on the land or a parcel of land on which there is a building under construction that, when completed, will constitute one or more dwellings. |
|---|
Strata lot | If it is lawfully occupied as a separate dwelling, or suitable for lawful occupation as a separate dwelling. |
|---|
Utility lot | If its use is restricted to the owner or occupier of a strata lot. |
|---|
Land use entitlement | If it entitles the holder of the land use entitlement to occupy a building, or part of a building, as a separate dwelling e.g., company title and residential flats. |
|---|
Parcel of
vacant land | Zoned or otherwise designated for use for residential or principally for residential purposes. |
|---|
Residential land does not include land used for primary production that is exempt from Land Tax (refer to section 10AA of the Land Tax Management Act 1956).
If a property has both residential and commercial purposes (mixed use property) the surcharge is calculated on the value of the residential component (refer to section 104ZB of the Duties Act 1997).
Residential-related property acquired for a commercial purpose may be exempt from Surcharge Purchaser Duty but is conditional on the property type and the use of the property. Revenue Ruling G011 must be read in conjunction with this guide and provides further information on residential premises that are not considered dwellings.
What transactions are liable to Surcharge Purchaser Duty?
Surcharge purchaser duty may be payable on a variety of property transactions involving residential-related property, such as:
- agreements for sale of land
- real property transfers
- declarations of trust
- transfers of lease/leasehold interest
- deceased estate transfers (if ad valorem duty is payable pursuant to section 63(2) of the Duties Act 1997)
Section 104L, section 104N and section 104O of the Duties Act 1997 identify all transactions that may be subject to Surcharge Purchaser Duty.
Transactions that are exempt or receive a concessional rate of transfer duty under Chapter 2 of the Duties Act 1997 may still be liable to Surcharge Purchaser Duty under Chapter 2A of the Duties Act 1997, if any purchaser/transferees are foreign persons. This includes:
Other transactions, if exempt or subject to a concessional rate of transfer duty, are exempt from Surcharge Purchaser Duty and include:
The Duties Document Matrix (PDF, 356.39 KB) provides a comprehensive list of transactions where there may be a surcharge liability under Chapter 2A of the Duties Act 1997.
What is the liability date for Surcharge Purchaser Duty?
A liability for Surcharge Purchaser Duty arises when a transfer of dutiable property occurs OR if the transfer of property is effected by an instrument, liability arises when the instrument is first executed.
For an Agreement for Sale of Land, the date of first execution is the date of exchange.
For an electronic registry instrument, for example when there is a transfer without a contract for sale, the date of first execution is taken to be when it is first digitally signed by a subscriber or otherwise, the date the information relating to the instrument is first received by Revenue NSW.
The liability date is often referred to as the relevant date when determining Surcharge Purchaser Duty liability.
Reference: section 104Q and section 12 of the Duties Act 1997.
How is Surcharge Purchaser Duty calculated?
Surcharge Purchaser Duty is calculated on the dutiable value (the greater of the purchase price or value) and is paid in addition to transfer duty payable on the acquisition of residential-related property.
Reference: section 104U of the Duties Act 1997.
| Transactions dated | |
|---|
| 1 July 2017 - Present | 8% |
| 21 June 2016 - 30 June 2017 | 4% |
Surcharge duty calculator
Contact us
Should you require further assistance or clarification, please contact:
Duties on 1300 139 814 or email [email protected]
