If you're 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 must pay 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 surcharge.
The surcharge rate is:
Surcharge is assessed in relation to each parcel of residential land and is proportional to ownership.
There are no joint assessments and secondary deductions don't apply.
A principal place of residence exemption may apply to you from the 2018 tax year. It applies for one year and one residential property. Residency requirements must be met.
Residential land includes any of the following.
Parcel of land
On which there are one or more dwellings, or on which there is a building under construction that, when completed, will constitute one or more dwellings.
If it is lawfully occupied as a separate dwelling, or suitable for lawful occupation as a separate dwelling.
If its use is restricted to the owner or occupier of a strata lot.
If it gives 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 doesn't include land used for primary production that is exempt from land tax.
Surcharge applies if a building has both residential and commercial purposes. In this case, an apportionment factor is used to apportion the land value.
Surcharge land tax does not apply to commercial land, however some commercial businesses provide a form of housing on residential land.
Revenue Ruling G 011 clarifies where the surcharge will not apply to residential premises. The ruling identifies the following commercial premises as not being liable for surcharge:
It is important to refer to Revenue Ruling G 011 for information on the features that must be present to meet the requirements.
If the land you own falls into one of these categories, you can apply for an assessment or reassessment via our online services. The supporting documents you may need to provide when you apply are detailed below.
Please provide the types of documents under ‘Hotels, motels and inns’, as applicable
The following visa holders will be exempt from surcharge land tax on their principal place of residence if they use or intend to use and occupy their home for a continuous period of 200 days in a land tax year:
Dates to remember:
You can apply for this exemption online. Please note, you may need to provide a copy of your visa.
In 2017 amendments were made to provide for surcharge concessions to Australian-based developers who are foreign persons.
There are two forms of concession or exemption.
Guidance on the circumstances for granting or revoking an exemption are provided in the Revenue Ruling.
If an exemption is granted and the land tax and/or surcharge has already been paid you can apply for a refund.
An application for refund must be made:
The 10 year period applies to land acquired after 21 June 2016. If the completion of the land occurred before 21 June 2016, then a five year period will apply.
To apply for a refund, exemption or reassessment you must apply online.