Australian based developers that are foreign persons
Generally when a foreign person buys residential land that person is liable to surcharge purchaser duty. However, if you’re an Australian-based developer who is a foreign person you may be able to claim an exemption or refund.
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 a full refund is likely, an exemption from surcharge purchaser duty will be approved instead of a refund. More information on the upfront exemption is available in Commissioners Practice Note CPN 023.
- 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.
Type of concession applied
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.
Requirements to meet
The minimum requirements for an Australian-based developer to be granted a refund are that it meets the following requirements of the Duties Act 1997 Section 104 ZJA:
- it must be an Australian corporation and
- be a transferee under a transfer of residential land, and
- it (or a related body corporate) has constructed a new home on the residential land that it has then sold to a person who is not an associated person of the transferee, or
- it has subdivided the residential land for the purpose of new home construction that it has then sold after the issue of a subdivision certificate for the subdivision, or
- it (or a related body corporate) will use the land wholly or predominantly for commercial or industrial purposes
Note: Exemption under Sec 104ZJA of the Duties Act 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 (refer to Section 157H of the Duties Act 1997 for relevant acquisition by landholder).
Applying the concession
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.
When to apply
An application for reassessment and refund must be made
- within 12 months after the completion of the sale of the new home or the issue of the subdivision certificate or
- once the transferee (or a related body corporate) commences using the land wholly or predominantly for commercial or industrial purposes
Applications must be made no later than 10 years after completion of the transfer of residential-land to the Australian-based developer.
How to apply
Application for exemption or reassessment cannot be processed on EDR and must be made by way of submissions via our eDuties portal.
The submission must set out the grounds for exemption or reassessment together with documents set out in clause 11 to support clause 9 and 10 of Revenue Ruling No. G 013: Exemption from surcharge for new home development by Australian-based developers that are foreign persons.
For applications for exemption where a transaction has been entered into, and no surcharge purchaser duty has been paid, the lodgement will also need to include:
Applications for pre-transaction approvals must also be made by way of submissions via the eDuties portal, setting out the grounds for exemption and include a declaration that the purchaser/transferee is eligible for an exemption as it has met (or will meet) the requirements in:
For reassessments, the lodgement will also need to include:
- copy of the original endorsed contract for the sale of land, and
- copy of the endorsed instrument of transfer, or transfer document from the ELNO workspace and
- copy of the completed purchaser/transferee declaration and
- 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
From 4 May 2020, paper and emailed lodgements will not be accepted. Lodgements must be submitted via the eDuties portal.
Processing of refund payments
Refund payments will be processed via Electronic Funds Transfer, and Applicants must submit their details by completing this form.
Eligible applicants will receive further instructions on how to proceed once their matter is determined.