Foreign investment tax liability with Australian partner

Hi there,

I've recently purchased a property in Victoria with my Australian registered defacto partner (I am a UK citizen with a 482 medium term Temporary Skills Shortage Visa). In the process of getting a 820 visa (about two months off - final checks).

The property is currently tenanted. We are planning on moving into the property in three months once the lease is up. We have been advised by our conveyancer that no foreign investment tax is due as it is our principle place of residence and my defacto partner is an Australian citizen. The stamp duty due is circa $28.5k on a $715 purchase (settlement mid-April whilst the Victorian stamp duty discount is still in placed).

Please could someone let me know how much foreign tax is due if we live there less than 12 months?

My limited understanding is that it will be 50% of the amount due for foreigners (on account of my partner) which equates to half of circa $85k (calculated by factoring in an extra 8% duty for foreigners) = $42.5 minus the original $25.5k equalling an addition $17k due. Is this the amount due if we move out before 12 months?

Any help would be greatly appreciated. Thank you.

 

My understanding is you have potentially breached the foreign investment review board rules concerning acquisitions.

Application for approval is required PRIOR to purchase and this may have consequences for sale on departure or not. Seek.legal advice immediately. Foreign purchaser stamp duty and land tax surcharge also may apply as can absentee tax. A conveyancer is not a legal adviser

 

Thanks for the reply Paul. I refer to this guidance document:

https://firb.gov.au/sites/firb.gov.au/files/guidance-notes/04_GN_FIRB.pdf

It states that 'an individual purchasing property as joint tenants with their Australian citizen spouse, New Zealand citizen spouse or Australian permanent resident spouse' is exempt from FIRB approval.

We were advised that defacto is recognised as spousal relationship.

 

Terrific. It should always occur when considering a purchase since the costs to remedy are very significant. The other nasty one introduced after your purchase was the stamp duty surcharge but it also has exemptions for some spouses if its for the home and the occupancy test is met (or an approval for a shorter duration). NZ has similiar laws to ours and I believe it is also a reciprocal exemption for us to buy there under the NZ, Overseas Investment Amendment Act for qualifying property. Some land is "sensitive" and may not be automatically exempt. eg buying a winery or a shore based property.

https://www.mactodd.co.nz/assets/Uploads/Australian-guide-to-buying-in-NZ-generic2.pdf have assisted clients and are good at speaking towards aussie investors and the variances in property dealing systems. eg Can a smsf buy a NZ property and how does it ?