News & Insights

Revenue New South Wales has recently announced that it has been wrongly imposing surcharge purchaser duty and surcharge land tax on citizens of Finland, Germany, New Zealand, and South Africa who have purchased or own residential real estate in New South Wales.

What happened

It’s very common for the Australian Government to have international tax treaties with different countries around the world which dictate how much or little tax those foreign citizens should be subject to in Australia. Following a review, Revenue NSW found that the foreign purchaser surcharge provisions were actually inconsistent with international tax treaties with the four countries mentioned above.  Based on how the treaties are intended to operate, the citizens of these countries ought to be exempt from paying the surcharges (8% stamp duty surcharge on residential land and annual 4% land tax surcharge for residential land).

What is the result of Revenue NSW’s announcement

If you are a citizen Finland, Germany, New Zealand, or South Africa, and you have purchased a property in New South Wales, you may be eligible for a refund to recoup the cost of the surcharge that you have paid.

The exemption applies retroactively from July 1, 2021, and citizens of the affected countries with residential property in New South Wales can apply for refunds. It seems the retroactive exemption will only apply from payments made on or after 1 July 2021, rather than liabilities arising on or after 1 July 2021.

As this is a developing issue, the determination of how this revelation will also affect corporations, trusts or partnerships requires further analysis, so stay tuned for a further update.

What do you do if you are eligible for an exemption

Revenue NSW have stated that they will contact those affected, however, if you believe you are eligible for a refund and have not heard anything from Revenue NSW, we recommend contacting them directly or seeking the advice of a lawyer to liaise with the revenue office on your behalf.

If you have questions about eligibility, the refund or the announcement’s potential impact on corporations, trusts and partnerships, it’s best to reach out to a trusted advisor.

Should you or someone you know be from the affected countries and eligible for the exemption, we suggest you have a chat with our friendly Tax or NSW Property team.

The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.