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If you are a foreign person and acquire residential-related property in NSW, you may pay surcharge purchaser duty unless you qualify for an exemption or concession.
Surcharge purchaser duty is calculated on the dutiable value and is paid in addition to transfer duty.
Unlike transfer duty, there is a flat rate for surcharge purchaser duty. The current rate is 9% of the dutiable value.
$186,667 plus $7.00 for every $100 over $3,721,000.
Residential properties also used for business
The premium rate applies to residential properties only.
If your property value is above the premium threshold and part of it is used for business, we will only use the part that is used for residential purposes when applying the premium transfer duty rate.
Rate for land over 2 hectares
For large residential properties, the premium transfer rate is calculated only on the first 2 hectares of the property, as a proportion of the overall value of the property.
The remainder of your property will be charged at the general rate.
A waterfront property in Balmain is scheduled for auction in two weeks with a price guide of $3.5 - $3.7 million.
Similar waterfront properties in the street have recently sold at auction for between $3.45 - $3.65 million.
Emma falls in love with the property and is worried about losing it at auction. She makes a pre-auction offer of $3.85 million, which the vendor accepts immediately, cancelling the scheduled auction.
Analysis
Purchase price: $3.85 million (the amount Emma offered to secure the property pre-auction)
Market value: $3.55 million (based on recent comparable auction results)
Dutiable value: $3.85 million (the higher of the two values)
Outcome
The amount she paid to secure the property represents the actual consideration, and Revenue NSW will use this higher amount for calculating duty.
Emma does not need to provide a formal valuation.
Calculation
The dutiable value of this property is over the current premium threshold.
The current rate for a property with a dutiable value of $3,850,000 is $186,667 plus $7.00 for every $100 over $3,721,000.
The premium duty formula for this property is:
$186,667 + ($3,850,000 - $3,721,000) x 0.07 = $195,697.
Total transfer duty and premium duty payable is $195,697.
Family transfer – market value exceeds purchase price
Tuan owns a block of vacant residential land in Nowra valued at $450,000.
He decides to sell the land to his son, Duy, for $300,000 so that Duy can build a larger home for a growing young family.
Duy already owns a small apartment with his partner and does not qualify for the First Home Buyers Assistance Scheme.
Analysis
Purchase price: $300,000 (the amount Duy actually paid)
Market value: $450,000 (the price the land would fetch in an open market transaction)
Dutiable value: $450,000 (the higher of the two values)
Outcome
Despite Tuan only paying $300,000, transfer duty will be calculated on the market value of $450,000.
Revenue NSW will typically ask for a valuation to determine the market value for transactions that are not conducted at arm's length.
Calculation
The current rate for a property with a dutiable value of $450,000 is $11,152 plus $4.50 for every $100 over $372,000.
The transfer duty formula for the property is:
$11,152 + ($450,000 - $372,000) x 0.045 = $14,662.
If you are a solicitor, conveyancer or accountant visit the Property Professionals Resource Centre for access to eDuties and Electronic Duties Return, as well as detailed guides.
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).
