Proposed NSW Foreign Buyer Tax Changes

The NSW Govt are announcing new changes to property stamp duty and land tax to discourage non-citizen foreign buyers of NSW property.

To be announced this afternoon.

Proposed stamp duty will become 8% (currently 4%) and Land Tax Surcharge will be increased from 0.75% to 2% per annum. This will affect :
- Non-citizen buyers of NSW real estate;
- Non-citizen buyers and occupiers of homes in NSW; and
- trusts where a potential beneficiary is not excluded from the terms of the trust and they are non-citizens

These changes are said to fund increased stamp duty concessions for first home buyers.

These laws are not to be confused with the FIRB prohibition on certain acquisitions (ie existing residential property) which continues to apply.

 

That would be harsh.
Especially on permanent residents.

 

Permanent is considered foreigner??

 

Non-citizens seem to be foreigners accord to Paul's quote.

Will need to wait to see the legislation to know for sure.

 

Its same taxes that already exists...Just the rate goes up....Value of citizenship just went up. Watch for the line forming

Land tax surcharge and Stamp Duty surcharge
Land tax surcharge | Office of State Revenue
Surcharge purchaser duty | Office of State Revenue

 

Looking at the OSR website, Permanent Residents living in Australia for 200 days or more is OK.

Foreign person – individual
An individual, who is not an Australian citizen, is a foreign person if they are not ordinarily resident in Australia.

Australian citizens are not foreign persons, regardless of where they live. Permanent residents of Australia are not foreign persons so long as they are ordinarily resident in Australia.

New Zealand citizens are not foreign persons if they hold a special category visa, within the meaning of section 32 of the Migration Act 1958 of the Commonwealth and they are ordinarily resident in Australia.

Ordinarily resident
An individual is ordinarily resident in Australia for the relevant land tax year if the individual:

• ƒƒhas actually been in Australia during 200 or more days in the previous calendar year, and
  
  
• ƒƒis not (or, if not in Australia, was not immediately before their most recent departure from Australia) subject to any limitation as to time for their continued presence in Australia.
  

This does not include the date of arrival or the date of departure.

 

Its quite complex...The "ordinarily resident" rule is VERY complex. Many people do have visa's with limitations. Only a true PR often meets this test. This can also trigger FIRB problems at times too. Throw in trusts and its a minefield.

I have been telling people who ask to see a solicitor before contracting if they are unsure.