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Surcharge land tax

Make sure you’re up-to-date on the latest changes to taxes, duties and surcharges handed down in the NSW Budget. Don’t miss our free State revenue update seminars. Register now

State Revenue Legislation Further Amendment Bill 2019 – Surcharge Land Tax on Discretionary Trusts

The State Revenue Legislation Further Amendment Bill 2019 contains provisions which clarify when a trustee of a discretionary trust is liable for surcharge land tax (or surcharge purchaser duty, as the case may be).

Trustees that may have inadvertently incurred surcharge land tax may receive an exemption (or refund) if their trust deeds are amended in accordance with the legislation.  New deeds will need to meet the requirements of the legislation in order to avoid any surcharge liabilities. The Bill currently requires affected deeds to be amended by 31 December 2019.

As the Bill has yet to be passed by the Parliament, the Government intends to extend this deadline to a later date, in 2020. However, trustees are encouraged to amend their deeds by midnight 31 December 2019, if possible, to avoid incurring a land tax surcharge liability and having to apply for an exemption or refund.


If you're a foreign person who owns residential land in NSW, you must pay a land tax surcharge in addition to any land tax you may already pay.

The surcharge rate is:

  • 0.75 per cent from the 2017 land tax year, and
  • two per cent from the 2018 land tax year onwards.

You must pay the surcharge on the taxable value of all residential land that you own as at 31 December each year.

A principal place of residence exemption may apply to you from the 2018 tax year. It applies for

  • one year
  • one residential property, and
  • residence requirements must be met.

You may be required to pay the surcharge even if you do not pay land tax.

The 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.

There is no tax-free threshold applicable to the surcharge.

Surcharge purchaser duty also applies to the purchase of residential property and other dutiable transactions defined under the Duties Act.

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