An explanation of the terms used in the applicable legislation and Revenue rulings.
If you are not an Australian citizen or an ordinarily resident you are considered a foreign person for surcharge purposes.
New Zealand citizens are not foreign persons if they hold a special category visa, within the meaning of section 32 of the Commonwealth Migration Act 1958, and they are ordinarily resident in Australia.
Ordinarily resident means you:
The period of time includes the date of arrival or the date of departure.
A corporation is a foreign person if:
The trustee of a trust is a foreign person if:
Beneficiaries are liable for proportionate interests where a trust is a fixed trust for land tax purposes. However, if the beneficiary defaults, the trustee is responsible to pay the surcharge.
Beneficiaries are not treated as owners for special trusts and do not have to pay the surcharge unless one or more beneficiaries are foreign persons. In that case the trustee is liable for surcharge land tax on their interest in the property.
A discretionary trust is exempt from surcharge taxes. You can apply for retrospective exemption if the trust deed is amended to remove foreign persons from the list of beneficiaries within six months after granting the exemption.
A person holds an interest in an entity if the person, alone or together with one or more associates:
Interest in a trust is:
For a discretionary trust, each beneficiary is taken to hold a beneficial interest in the maximum percentage of income or property that the trustee may distribute to that beneficiary.
A person holds a substantial interest in an entity or trust if:
Two or more persons hold an aggregate substantial interest in an entity or trust if:
The definition of associate includes:
A relative of a person means:
Residential land includes any of the following.
|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 eg 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.
The surcharge applies if a building has both residential and commercial purposes. In this case, an apportionment factor is used to apportion the land value.