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Surcharge purchaser duty exemption for Australian-based developers
To support the NSW Government’s housing affordability strategy, Australian-based developers who are foreign persons may be eligible for an exemption or refund on surcharge purchaser duty.
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Exemption or refund
The concession will be administered on an exemptions and/or refunds basis.
This depends on whether the Chief Commissioner of Revenue NSW is of the opinion that the Australian-based developer would likely become entitled to a full refund of the surcharge purchaser duty on a transaction or a class of transactions to which the concession applies.
If the surcharge purchaser duty was paid on a transaction prior to the exemption being approved, the exemption may apply retrospectively and a full refund granted.
If a full refund is unlikely, the surcharge purchaser duty must be paid and refunds will be made on a whole or proportionate basis, in accordance with the Treasurer’s Orders.
The Australian‑based developer must meet the conditions of the exemption in section 104ZJA(1) of the Duties Act 1997 (DA 1997) within 10 years of completion of the transfer. This 10-year period cannot be extended.
How the exemption is administered
To support the NSW Government’s housing affordability strategy, the Chief Commissioner of Revenue NSW will consider granting exemptions from surcharge purchaser duty before administering refunds on a proportionate basis.
Eligibility for exemption will depend on the Australian-based developer supplying documents, which may assist the Chief Commissioner of Revenue NSW in forming an opinion on entitlement.
If the requirements are satisfied a refund of the whole or a proportion of the surcharge purchaser duty will be paid in line with an order made by the Treasurer.
If the developer is an ‘exempt transferee’, a refund of the full amount of surcharge purchaser duty will be granted however the Treasurer’s orders would not apply.
Exemptions for future transactions
An ‘exempt transferee’ may, for future transactions, be exempted from surcharge purchaser duty.
Approval as an ‘exempt transferee’ may be subject to specific conditions which could be imposed.
The granting of pre-transaction approvals may be considered where there is evidence of the developer's past involvement in new home construction or the subdivision of land for new home construction.
Eligibility requirements
To be granted an exemption or refund a foreign Australian-based developer must meet the requirements in section 104ZJA of the DA 1997:
The Australian-based developer must:
be an Australian corporation
be a transferee (or related body corporate) under a transfer of residential land, and
meet one of the following conditions:
constructs a new home on the residential land and sells it to a person who is not an associated person of the transferee
subdivides the residential land for the purpose of new home construction and sells the subdivided land after the issue of a subdivision certificate for the subdivision, or
after completion of the transfer, the land has been used by the transferee wholly or predominantly for commercial or industrial purposes.
Note
The exemption under section 104ZJA of the DA 1997 only applies to the direct transfer of land to an Australian-based developer.
The acquisition of an interest in a landholder does not fall within this provision. See section 157H of the DA 1997 for relevant acquisition by landholder.
Revenue Ruling G009: Definition of a foreign person outlines how Revenue NSW determines ‘foreign person’ status for surcharge purchaser duty and surcharge land tax, covering individuals, corporations and trusts.
if the March 2018 (or later) version of the Purchaser/Transferee declaration has not been completed, a statutory declaration that the purchaser/transferee is eligible for an exemption as it has met (or will meet) the requirements in:
Revenue NSW will review your application and supporting documents. We may request additional evidence to verify the information you provide.
Your legal representative can advise when you can expect a decision about your application.
If the requirements are satisfied a refund of the whole or a proportion of the surcharge purchaser duty will be paid in line with an order made by the Treasurer.
If the developer is an ‘exempt transferee’, a refund of the full amount of surcharge purchaser duty will be granted however the Treasurer’s Orders would not apply.
Duties Notice of Assessment
A Duties Notice of Assessment (Notice of Assessment) is a document from Revenue NSW that informs a purchaser or transferee of the amount of duty they must pay.
When your application has been assessed your legal representative will receive a Notice of Assessment showing:
whether you must pay surcharge purchaser duty, and/or
the amount of any transfer duty you owe.
Read more about paying duties, including what happens if you do not pay by the due date.
Processing of refund payments
Refund payments will be processed via Electronic Funds Transfer.
If we reject your application for an exemption, you can lodge an objection with us within 60 days of the decision.
If your objection is unsuccessful, or we do not respond within 90 days, you have the right to seek a review by the NSW Civil and Administrative Tribunal (NCAT).
Revenue NSW monitors an Australian-based developer's compliance with its obligations on an ongoing basis.
An exemption may be subject to conditions, such as:
requirements to report periodically on the progress of a development, or
providing updates when the subdivision certificate is issued.
The Australian‑based developer must meet the conditions of the exemption in section 104ZJA(1) of the DA 1997 within 10 years of completion of the transfer. This 10-year period cannot be extended.
The exemption may be revoked if the obligations are not met. Surcharge purchaser duty will be assessed as if the liability to duty arose at the date the revocation was notified based on the value of the property as of that date.
Circumstances in which an exemption may be revoked include, but are not limited to, the following:
Land purchased to build new homes is on-sold before a new home is constructed.
Land is on-sold before a subdivision certificate is issued.
A new home is sold to an associated person.
Land is on-sold after 10-year timeframe.
Obligations required under the exemption are not met within the 10-year timeframe.
Learn more about surcharge purchaser duty for corporations, including how a corporation’s foreign status is determined by the substantial interest or aggregate substantial interest of shareholders.
Australian-based developers who own residential property in NSW may also be eligible for a surcharge land tax exemption.
Contact us
Call the duties team on 1300 139 814 or +61 2 7808 6916 if you are overseas. Staff are available Monday to Friday, 8.30am to 5.00pm AEST (excluding public holidays).
