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Learn about surcharge land tax in NSW for foreign owners, who may be liable to pay the surcharge, eligibility criteria for an exemption and how to apply
New land tax website launching Monday 5 May
We're making it easier for you to understand and manage your land tax with a new website featuring streamlined design, clearer information on how land tax is calculated, and faster access to Land Tax Online. Learn more about the updates and how they will benefit you.
If you are 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 are generally considered a foreign person, unless you are:
an Australian citizen, or
a permanent resident of Australia and you have lived in Australia for 200 days or more in the 12 months prior to the taxing date of 31 December (the 200 days do not have to be consecutive).
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 land tax rate is:
2% from the 2018 land tax year
4% from the 2023 land tax year
5% from the 2025 land tax year onwards.
Surcharge land tax is assessed in relation to each parcel of residential land and is proportional to ownership.
There are no joint assessments and secondary deductions do not apply.
Surcharge Assist Tool
The Surcharge Assist Tool is available to help individuals identify if they may be liable for surcharge land tax.
You can confirm your foreign status in Land Tax Online via your MyService NSW Account. You will need your Client ID and Correspondence ID to log in, which can be found on your most recent piece of correspondence received from us.
For more information on surcharge land tax relating to individual and non-individual owners such as companies, trusts, partnerships, foreign governments etc. please watch the following short video.
Surcharge land tax calculation examples
Example 1 - including land tax
Landowner
Michael
Property
Property A (Residential) Land value: $600,000
Property B (Residential) Land value: $600,000
Land tax calculation
$1,200,000 (total land value) - $1,075,000 (2024 general land tax threshold) x 1.6% + $100 (general land tax rate) = $2,100
Surcharge land tax calculation
$1,200,000 (total residential land value) x 4% (2024 surcharge rate) = $48,000
Amount payable
Land tax payable = $2,100 Surcharge land tax payable = $48,000 Total = $50,100
Example 2 - excluding land tax
Landowner
Michelle
Property
Property C (Residential) Land value: $500,000
Land tax calculation
Michelle is not liable for land tax as her property does not exceed the 2024 land tax threshold ($1,075,000)
Surcharge land tax calculation
$500,000 (total residential land value) x 4% (2024 surcharge rate) = $20,000
Amount payable
Land tax payable = $0 Surcharge land tax payable = $20,000 Total = $20,000
Example 3 - including commercial land
Landowner
Jim
Property
Property D (Residential) Land value: $500,000
Property E (Commercial) Land value: $700,000
Land tax calculation
$1,200,000 (total land value) - $1,075,000 (2024 general land tax threshold) x 1.6% + $100 (general land tax rate) = $2,100
Surcharge land tax calculation
Property E is not included in this calculation as surcharge land tax does not apply to commercial land.
$500,000 (total residential land value) x 4% (2024 surcharge rate) = $20,000
Note: if a building has both residential and commercial purposes, an apportionment factor is used to apportion the land value and calculate surcharge land tax.
Amount payable
Land tax payable = $2,100 Surcharge land tax payable = $20,000 Total = $22,100
Residential land
Residential land includes any of the following.
Description
Conditions
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.
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 gives the holder of the land-use entitlement to occupy a building, or part of a building, as a separate dwelling, for example, 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.
Intended principal place of residence for surcharge land tax
The following visa holders will be exempt from surcharge land tax on their principal place of residence (PPR) if they use or intend to use and occupy their home for a continuous period of 200 days in a land tax year:
permanent visa holders
partner (provisional) visa holders (subclass 309 or 820)
holders of retirement visas (subclass 410 and 405).
You must apply for the exemption by 31 March in the relevant tax year.
Exemptions for retirement visas apply from the 2020 land tax year.
Note
For the 2023 and future land tax years you will need to be physically within Australia for a continuous period of 200 days during the land tax year. However, the Chief Commissioner may waive this requirement as per section 5B(2A) and 2B of the Land Tax Act 1956.
Revenue Ruling G011 clarifies where the surcharge will not apply to residential premises. The ruling identifies the following commercial premises as not being liable for surcharge:
Hotels, motels, and inns
Hostels and boarding houses
Student accommodation
Aged care and other care facilities
Bed and breakfast accommodation
Caravan and home parks
Separately titled rooms, apartments, serviced apartments, cottages and villas.
It is important to refer to Revenue Ruling G011 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 by lodging a return in Land Tax Online via your MyServiceNSW Account. The supporting documents you may need to provide when you apply are detailed below.
An exemption from the surcharge if it is satisfied that the land will be used for:
construction and sale of new homes, or
subdivision and sale for new home construction
From 19 May 2022, the concession also applies to land that is used wholly or predominantly for commercial or industrial purposes.
A refund from surcharge where the foreign person has not been granted an exemption from surcharge, but the land has been used for the above purposes.
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:
within 12 months of the home being sold or the issue date of the subdivision certificate, and
no later than 10 years after the acquisition of the land.
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 5 year period will apply.
In 2020, amendments were made to provide an exemption from surcharge for Australian Corporations where an eligible build-to-rent property has been constructed.
