Surcharge Stamp Duty no longer payable for New Zealand, Finland, German and South African Purchasers.
If you are considered a foreign person, you are typically subject to a foreign purchasers additional Surcharge Purchaser Duty of eight percent (8%) on a variety of property transactions involving residential-related property. These transactions include but are not limited to:
· agreements for sale of land
· property transfers
· declarations of trust.
Prior to 1 July 2021, this surcharge duty was applicable to all foreign persons, whether they transacted in their individual capacity, under a company or as the trustee of a trust. However, in a recent update, it has been determined that the NSW surcharge provisions are inconsistent with international tax treaties entered into by the Federal Government with New Zealand, Finland, Germany and South Africa.
As such, individuals that are citizens of these nations who purchase residential property or who own land in their own capacity will no longer be required to pay surcharge purchaser duty and surcharge land tax, effective immediately. If you purchased property on or after 1 July 2021 and are from the nations concerned, you may be eligible for a refund for the amount paid in Surcharge Purchaser Duties.
Further, if a corporations, trusts or partnerships is affiliated with these nations, they may also be affected by the international tax treaties. Accordingly, individuals acting as trustees of a trust, individuals that are general partners of a limited partnership and non-individual purchasers/transferees are not subject to surcharge purchaser duty if they are foreign persons solely by reason of a substantial interest (or an aggregate substantial interest) being held by a person from New Zealand, Finland, Germany or South Africa.
As such, the non-individual purchaser will be liable to surcharge purchaser duty if a foreign person that is not from one of these nations directly or indirectly holds a substantial interest in the purchaser/transferee.
To assist with all your property needs, please don’t hesitate to get in contact with the team here at Wainwright Legal on (02) 9170 0899