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  • The meaning of ‘ordinarily resident’, for surcharge purchaser duty purposes, is narrow and inflexible.
  • Holders of bridging visas do not satisfy the definition of ‘ordinarily resident’.
  • Even permanent residents will not be considered ‘ordinarily resident’ if they have not been in Australia for 200 days in the previous 12 months.

Lawyers who act for clients purchasing residential property in New South Wales need to understand when their client will be treated by Revenue NSW as a foreign person. This makes purchasers liable to payment of surcharge purchaser duty (‘SPD’) and surcharge land tax (‘SLT’).  Although SPD has been around since 2016, Lawcover continues to receive claims where an assumption that a purchaser is ‘ordinarily resident’ has been made in error.  A number of recent claims involved a client who is on a bridging visa pending the determination of an application for a partner visa.

The facts in these claims are similar to those in the decision of Van der Zanden v Chief Commissioner of State Revenue [2022] NSWCATAD 283.  In that case, Mr and Mrs Van der Zanden were purchasing a home in Newcastle.  Mrs Van der Zanden was an Australian citizen and Mr Van der Zanden was a citizen of the Netherlands.  He had applied for a sub-class 820 partner visa and, in the meantime, was on a bridging visa.  He had been living in Australia for more than 200 days and selected ‘ordinarily resident’ on the purchaser declaration form.   Later, the Chief Commissioner of State Revenue issued a notice of assessment requiring SPD to be paid on Mr Van der Zanden’s share.

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