New stamp duty surcharge for foreign purchases – NSW, QLD, SA, VIC

New South Wales, Queensland, South Australia and Victoria states have introduced a new stamp duty surcharge for foreign purchases. Properties in these states have seen consistent increases in prices through the decade. For this reason, expat investors are in a rush to purchase any property they can get due to the almost assured profits.

For example, the astonishing beaches and reefs in Queensland, Victoria’s vast coastline and the serene Blue Mountains of New South Wales make up the most enticing locations for foreign buyers due to the potential returns they can offer.

The stamp duty surcharge apply for temporary foreign citizens or residents buying residential or commercial properties in Australia.

Why the increase in stamp duty surcharge?

The recent surge in foreign buyer purchases has developed a high demand for both local and expat residents. Moreover, the rising population in Australia also creates a need for more and cheaper housing for the Australian citizens, especially in the four states. By increasing the taxes paid by investors, the states will then acquire more revenue to accommodate more Australian residents and therefore achieve a balance.

How were the taxes implemented?

Victoria increased its stamp duty surcharge for foreign purchases by 7% while New South Wales, Queensland and South Australia increase their tax to 8%, 3% and 7% respectively. This means foreign buyers will have to endure an extra cost on each of their residential properties in these particular states. The interests from all the residential properties owned by foreign investors are to be indicated under the expat tax returns in Australia.

Are there any exemptions or reliefs?

According to the 2001 Duties Act, foreign people engaging in a significant residential development are liable for relief from stamp duty increase as granted by the State Commissioner. Additionally, these exemptions only apply to potential buyers that meet any of these qualifications:

• Must be a foreign person. The person must be of a foreign citizenship or a temporary resident in the state.
• Must be of a foreign company. The company must be based outside Australia or is an Australian company with 50% interest held by an expat.
• Must have a trust. The expat must hold a minimum of 50% of the interest gained by the trust

If you are a foreign buyer and are looking to buy land in Australia, call or email us at Expat Tax Services. Our team of experienced professionals will give you the best advice on how to proceed in buying Australian property and filing your expat tax returns in Australia.