What is the change?
Surcharge land tax:
From the 2023 land tax year, surcharge land tax payable on residential land owned by foreign persons is increased from 2% to 4% of the taxable value of the residential land owned at midnight on 31 December 2022.
The discount for early payment of land tax is reduced from 1.5 per cent to 0.5 per cent if paid within 30 days after service of the notice of assessment.
FIRB Application Fee:
On 29 July 2022, the fees for FIRB application changed (doubled).
What is surcharge land tax?
Surcharge land tax is applicable for non Australia tax residents, including permanent residents who have not stayed in Australia for 200 days in the previous calendar year. If you’re 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 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.
What is land tax?
Land tax is an annual tax levied at the end of the calendar year on property you own that is above the land tax threshold. The principal place of residence is exempt.
*The current threshold for land tax is $822,000 in NSW (2022).
What is a “foreign person”?
You’re generally considered a foreign person, unless:
- you’re an Australian citizen; or
- you’ve lived in Australia for 200 days or more in the 12 months prior to the taxing date of 31 December, and you’re:
- a permanent resident of Australia, or
- a New Zealand Citizen, who holds a subclass 444 visa.
What is a “residential land”?
Residential land includes:
Am i eligible for exemption?
Although the new surcharge land tax does not sound ideal for a lot of foreign property buyers, there are ways to be exempted from it. Contact us to find out ways to exempt from surcharge land tax.
Reference:
NSW, Revenue. “Definitions.” Revenue NSW, www.revenue.nsw.gov.au/taxes-duties-levies-royalties/foreign-buyers-and-land-owners/definitions#property.