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NSW stamp duty surcharge

Discussion in 'General Property Chat' started by Dean Collins, 14th Jun, 2016.

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  1. Dean Collins

    Dean Collins Well-Known Member

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  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    It hasn't been explained yet.
    In VIC I believe their surcharge doesn't apply to citizens living abroad.
    In QLD non resident Australian citizens are penalised by having a lower threshold.

    So it could go either way.
     
  3. Dean Collins

    Dean Collins Well-Known Member

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    WTF??? Amateur hour surely legislation needs to be published before voting on June 21 right? eg I know the article says doesn't cover citizens but does it? doesn't it? when should we expect actual wording?
     
    Last edited: 14th Jun, 2016
  4. Dean Collins

    Dean Collins Well-Known Member

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    BTW Terry in case you want to ask the reporter who posted the article specific questions...

    - Sean Nicholls on Twitter
     
  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    I would prefer to wait under 21 June when the budget is announced. Until then is just speculation.
     
  6. Redom

    Redom Mortgage Broker Business Member

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    Curious about the QLD impact Terry if available yet - do you know where i can find some more info on impact on expats purchasing IPs?
     
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  7. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Hi Redom

    The extra land tax in QLD has been around for a while. I haven't heard anything about stamp duty yet.

    Tax Tip 96: QLD Land Tax for Non Residents Tax Tip 96: QLD Land Tax for Non Residents
     
  8. Daniel Taborsky

    Daniel Taborsky Well-Known Member Premium Member

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    In Victoria, the stamp duty surcharge (now 7%) applies to an individual who is not any of the following (s 3(1) Duties Act 2001 (Vic)):
    (a) an Australian citizen within the meaning of the Australian Citizenship Act 2007 of the Commonwealth;
    (b) the holder of a permanent visa within the meaning of section 30(1) of the Migration Act 1958 of the Commonwealth;
    (c) a New Zealand citizen who is the holder of a special category visa within the meaning of section 32(1) of the Migration Act 1958 of the Commonwealth

    For land tax in Victoria, the surcharge for land tax (now 1.5%) applies to an individual 'absentee owner' (s 3(1)
    Land Tax Act 2005 (Vic):
    (a) who does not ordinarily reside in Australia; and
    (b) who—

    (i) was absent from Australia on 31 December in the year immediately preceding the tax year; or
    (ii) in the year immediately preceding the tax year, was absent from Australia for a period of at least 6 months or for periods that when added together equal a period of at least 6 months
    Queensland has a similar definition of an 'absentee owner' for its land tax surcharge.

    The rules are more complex for companies and trusts.

    So in Victoria, Australian citizens and permanent residents are safe from the stamp duty surcharge but not necessarily the land tax surcharge.

    I expect NSW will adopt a similar approach to Victoria (for both the 4% stamp duty surcharge and the 0.75% land tax surcharge) seeing as they refer to the Victorian rules in their media release.

    Queensland
    Queensland has also annouced in today's budget that they will introduce a 3% stamp duty surcharge for foreign investors. Their definition of a foreign person is similar to Victoria (i.e. anyone other than an Australian citizen or permanent resident). However, unlike Victoria, Queensland has not provided a carve out for our New Zealand friends with special visas.
     
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  9. LibGS

    LibGS Well-Known Member

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    If you are a foreign property buyer purchasing in NSW, can you qualify for the $5000 stamp duty discount?
     
  10. Daniel Taborsky

    Daniel Taborsky Well-Known Member Premium Member

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    No
     
  11. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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  12. Dean Collins

    Dean Collins Well-Known Member

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    Hi Daniel, how do you figure Australian citizens can ever be classed as "Absetee" I don't own property in Vic so never looked into it but step 1 says if you are Australian citizen....= not absentee.

    However based on Terry's link....I do get slugged as a citizen living in the usa and not residing in Aust - Tax Tip 96: QLD Land Tax for Non Residents

    - Absentee individuals | State Revenue Office
     
    Last edited: 15th Jun, 2016
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  13. Cactus

    Cactus Well-Known Member

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    Yes and for Vic what happens if you have a discretionary trust and you have a family member (read potential beneficiary though not listed) that is not an Australian resident or citizen. @Terry_w

    My solicitor suggested amending the trust deed prior to settling some land shortly after the rule came in as their was ambiguity and the SRO would not clarify.

    They draft legislation so broadly and then struggle to clarify. It's pretty poor.

    I think the clarification you have listed was added latter following repeated questions from lawyers and accountants.
     
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  14. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Yes for the purchase of land in VIC if a foreigner is potentially a capital beneficiary of the trust then the trust would be considered a 'foreigner' and the extra duty applied
     
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  15. Daniel Taborsky

    Daniel Taborsky Well-Known Member Premium Member

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    Dean, you're quite right. I missed that part of the defintion of absentee owner when I was copying it across (not sure how I managed to do that!). Australian citizens and permanent residents will not pay the land tax surcharge in Victoria.