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Land Tax Surcharge and You

As part of the 2016/2017 budget, the Australian Government has made changes to the land tax as it applies to foreign nationals who own residential land.

Who does this affect?

These changes apply to any foreign persons who own residential land in NSW. A foreign person is defined as a person who is not an Australian citizen, and can be:

  1. an individual
  2. a corporation
  3. a trustee of a trust
  4. a beneficiary of a land tax fixed trust
  5. a government
  6. a government investor
  7. a partner in a limited partnership.

According to the ATO, “Note that a person who holds a Partner (Provisional) visa (subclass 309 or 820) will be treated in the same way as permanent resident visa holders. The 200 day requirement will need to be satisfied.”

How will this affect me?

If you are a foreign person owning residential land in NSW, you will now be required to pay a surcharge of .75 percent, beginning in the 2017 land tax year onwards. The Office of State Revenue (OSR) will begin calculating land tax surcharges from March 2017, and assessment notices will be issued.

The land tax surcharge applies to all land that you own in NSW, including your principal place of residence. This surcharge is calculated by the taxable value of all residential land that you may own. The surcharge is proportional to ownership, and no tax-free threshold applies.

What do I need to do?

If you are a foreign person and already pay land tax, you will need to update your residential land details and foreign status.

If you have never paid land tax before, you will need to notify the government of your foreign status and residential land details. A financial planner or accountant can assist you with this.

What else should I know?

  • Australian citizens are not considered foreign persons, even if they live outside of Australia.
  • There are no joint assessments on this surcharge, and secondary deductions to not apply.
  • Foreign persons need to register or update their details by the due date to avoid any possible penalties.
  • A financial adviser or accountant can assist you in registering or updating your details.

How can YML help?

Talk to YML Group today to see how YML Group can assist you with your real estate investments. Contact us on (02) 8383 4400 or by visiting the Contact Us Page

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