Tax Tip 469: NSW Land Tax Surcharge and Surcharge Purchaser Duty for Citizens of New Zealand, Finlan

Definitely. If you are a foreign person then the land tax surcharge would apply. Even if you were a citizen of one of those countries.

But are you a 'foreign person'? If you have a permanent visa and stay here for more than 200 days per calendar year you wouldn't be under NSW law, generally.

 

i'm PR but live 200+ days outside so no way around this.

Saving grace, the statement reads "However, changes to federal legislation means that citizens of these nations may need to pay surcharge land tax on future land tax assessments for residential land they own in NSW"

in Tax office terms "may need to pay" usually means yes they will make us pay whilst saving grace is reference to "future assessment" so not restroscopic.

Just checked land valuation and i will be stiched with a $16k land tax bill for a $gross rental income of $51k. yuck. reaching out to my agents to get rid of the stock as soon as July hits.

 

Unfortunately the Australian Government can't just unilaterally decide that it will ignore parts of International Tax Treaties that it has signed that it doesn't now like. The treaties concerned are clear and are based on the OECD model tax treaty. Change requires a treaty to be opened and re-negotiated - a process that takes years. Given the issue in question is discrimination based on citizenship I don't see any other country agreeing to introduce such discrimination, given it goes against the OECD model.

The Australian politicians needs to familiarize themselves with this:

UNTC

In particular Article 26 of this Vienna Convention on the Law of Treaties.

 

The OECD model convention is the basis for our model tax treaties and it does provide for such a issue. Provided the federal taxing state allows it through a instrument (law). The proposed law change will do that. The original treaties were made at times when there was no surcharge duty or land tax etc. It was neither included or excluded and the treaty was silent for those specific countries which fell into a time period gap where a former OECD model was used . There is no need to renegoiate a thing. And no issues of dual taxation can arise. The correction of the Federal register made via Parliament will remedy the issue from that date as it was formerly agreed. I am surprised none of the states have demanded the Commonwealth compensate their loss... I think the arguemnet I read from a lawyer explained why. The error means the states have no right until the change was made. It is them that failed to consider and request the Commonwealth fix the treaty to comply with OECD rules. They assumed.

The UN has no relevance to OECD model tax treaties between nations. Our laws are framed to ensure COMMONWEALTH laws comply with UN agreemnets at all time when made or changed. States are not a party to the UN agreement. But the UN has no powers to enforce such a silly rule. What will they do send in peacekeepers ? Art 26 isnt that terrifying....It is "" “Pacta sunt servanda”, Every treaty in force is binding upon the parties to it and must be performed by them in good faith"".

Taxing isnt discriminatory. Nationality is not discrimination. A law which specifcally taxes a nationality may be, but the law doesnt do that. It just considers foreign persons. At its most basic level our tax scales do this. resident v non-resident tax rates etc