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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.
Note: Between 21 February 2023 and 8 April 2024, foreign persons who were citizens of certain nations were not considered to be subject to surcharge purchaser duty due to international tax treaties. Changes in federal legislation means that this no longer applies.
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.
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:
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:
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.
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.
