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  • Surcharge purchaser duty and surcharge land tax are substantial up-front and annual additional costs for a ‘foreign person’ acquiring and owning residential land in NSW.
  • Determining whether a landowner is a ‘foreign person’ can be complicated and the result sometimes surprising.
  • Under current NSW law, discretionary trust deeds may need to be amended to prevent surcharge liabilities unexpectedly arising. The surcharge treatment of permanent residents can vary depending on their travels from year-to-year.


As the federal parliamentary eligibility crisis shows, it can be surprising who is a bit ‘foreign’.Similar problems can arise under recent NSW laws (with comparable laws in Queensland, Victoria and South Australia; Tasmania and Western Australia to follow) imposing substantial duty and land tax surcharges on a ‘foreign person’ acquiring and owning residential land. Determining who is a ‘foreign person’ is sometimes complicated, especially with trusts, companies and permanent resident individuals.

Surcharge purchaser duty

From June 2016, surcharge purchaser duty applies to a ‘foreign person’ acquiring NSW residential land, such as by way of a transfer, agreement for sale, declaration of trust, surrender, option or assignment. Residential land includes land on which there are one or more dwellings (or will be following construction), strata lot dwellings and vacant land zoned residential, but not land used for primary production. Hotels, boarding houses, student accommodation and aged care facilities are not residential land (Revenue Ruling G 011).

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