Recent changes regarding Australia’s compliance with international tax treaties will specifically affect property purchases in NSW. These changes, which affect the calculation of transfer duty, will have implications for citizens of certain countries who are acquiring residential property. It is important to note that these duties changes have implications beyond NSW and affect the duty payable in all Australian states and territories.

On 8 April 2024, the Federal Treasury Laws Amendment (Foreign Investment) Act 2024, came into effect. This amendment now holds all foreign citizens accountable for surcharge purchaser duty if they buy residential-related property in their personal capacity on or after 8 April 2024.

Individual purchasers or transferees from the countries listed above will only be exempt from surcharge purchaser duty if they fall into specific categories, which are:

  1. Being ordinarily resident in Australia;
  2. Being an exempt permanent resident;
  3. Holding a Partner (provisional) visa (subclass 309 or 820) and meeting the residence requirements; and
  4. Holding a Retirement visa (subclass 405 or 410) and meeting the residence requirements.

Moreover, individuals who are:

  1. acting as trustees of a trust;
  2. general partners of a limited partnership;
  3. and non-individual purchasers;

may also be subject to surcharge purchaser duty if they qualify as foreign persons due to substantial interests held by individuals from the countries listed above.

Additionally, the Revenue NSW systems have been updated to accommodate transactions involving citizens of the affected countries through EDR. For further clarification on specific transaction requirements, we encourage you to refer to the Duties document matrix.

These amendments mark a significant step towards a system of property transfer duty which is equally applied to all residential property purchases in NSW, ensuring fairness and compliance. Should you have any queries or require assistance regarding these changes, please do not hesitate to contact Wayne Riggien (wayne@morganenglish.com.au), Jacki Osmand (jacki.o@morganenglish.com.au), and our experienced Land + Home + Water team for an in-house duty assessment today.

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