The Law Society of NSW Specialist Accredititation 


Any information contained in a blog on this website is general in nature only. The content of any blog posted below reflects information which is known to us as at the date of the posting of the blog. Please be aware that the law regularly changes. Please do not rely on the general information contained in the below blogs, instead we recommend that you contact us to obtain legal advice tailored to your own specific situation.



Surcharge Land Tax

Amanda Quin - Monday, December 12, 2016


Surcharge Land Tax is payable by foreign persons in addition to any other land tax that may be payable on land held in NSW. The surcharge is 0.75% of the value of the land held by the foreign person.

There is no principal place of residence exemption or tax free threshold for the foreign persons land tax surcharge.

All other normal land tax exemptions do apply (ie the land tax surcharge is not paid on primary production land).

As per traditional land tax, the surcharge is only payable on the proportion owned by the foreign person.

Given the 200 day rule for permanent residents (see below paragraph titled WHO IS A FOREIGN PERSON), a person may be a foreign person one year, but not the next and so on.

If you or any company or trust that you control is a foreign person, then you may need to register with the OSR NSW in relation to surcharge land tax.



  • Any natural person who is not ordinarily resident in Australia or does not have a right to reside in Australia.
  • Any natural person with only a temporary right to reside in Australia (irrespective of how long that temporary right may be or how long they have lived here).
  • Any natural person holding a permanent visa, who has not been in Australia for at least 200 days during the 12 months prior to the relevant liability date. (NB there are special rules for off the plan though).
  • Any discretionary trust where any foreign person (including foreign companies or foreign trusts) are a potential beneficiary (irrespective of whether any distributions have ever been made to them).
  • Any company or unit trust in which a foreign person (whether natural or otherwise) and the associates of that foreign person (even where the associates are Australian citizens) has at least a 20% interest in the entity.(For example, if your spouse was a UK citizen and if he or she held 5% of the shares in a company and you held 18% of the shares in that company, then because you are an associate of your spouse, then that makes that company a foreign person. Likewise with units trusts).
  • Any company or unit trust in which multiple foreign persons (and the associates of those persons) hold at least a 40% interest.


  • Australian Citizens, no matter whether they currently reside in Australia or not.
  • Any natural person holding a permanent visa, who has been in Australia for at least 200 days during the 12 months prior to the relevant liability date.
  • Any citizen of New Zealand who entered Australia legally and has resided in Australia for at least 200 days during the 12 months prior to the relevant liability date.
  • Any discretionary trust where none of the potential beneficiaries are foreign persons.


A person holds an interest in an entity if that person, either alone or with one or more of their associates:

  • Controls that percentage of the voting power; or
  • Holds interests in that percentage of the issues securities in the entities (ie shares or units); or
  • Holds options which would give them that percentage of interest if the options were exercised.

Associates are a person’s spouse, parents, lineal descendants (including adopted children), siblings, aunts, uncles, nephews, nieces and grandparents AND all those people for their spouse as well.