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Stamp duty surcharge for residential property

Posted by Joanne Anderson on 15 September 2016
Stamp duty surcharge for residential property

The NSW Budget introduced a 4 per cent surcharge duty on the purchase of residential real estate by foreign persons, commencing on 21 June 2016. The surcharge is in addition to the duty payable on the purchase of residential property.

What is a foreign person?  

The Office of State Revenue has a defined list of what a foreign person means, including (but not limited to):

  • an individual not ordinarily resident in Australia; or

  • a corporation in which an individual not ordinarily resident in Australia, a foreign corporation or a foreign government holds a substantial interest; or

  • the trustee of a trust in which an individual not ordinarily resident in Australia, a foreign corporation or a foreign government holds a substantial interest; or the trustee of a trust in which 2 or more persons, each of whom is an individual not ordinarily resident in Australia, a foreign corporation or a foreign government, hold an aggregate substantial interest

An Australian Citizen does not fall within the definition of a foreign person, irrespective of where they reside.

In addition to the surcharge duty, foreign persons will:

  • no longer be entitled to the 12 month deferral for the payment of stamp duty for off-the-plan purchases of residential property;
  • incur a 0.75% surcharge land tax of the taxable value of residential land owned as at midnight on 31 December in any year, commencing with 2016

Whether a purchaser of residential property is deemed as a foreign person or not, the Office of State Revenue requires a declaration be lodged in an approved form.

At Anderson Conveyancing we have the necessary declarations available for signature in our office or can provide a list of approved witnesses if you are unable to attend our office to sign.

If you would like further information, please do not hesitate to contact us.  You may also wish to refer the Office of State Revenue website for more details. 

Author: Joanne Anderson

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