The Law Society of NSW Specialist Accredititation 


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Amanda Quin - Monday, December 12, 2016


Surcharge Stamp Duty is payable on residential property in NSW (at a rate of 4% of the value of the property) – where residential property in NSW is transferred or sold to foreign persons (including foreign trusts and companies). The surcharge duty is payable by the foreign person or entity.

Residential property includes vacant lots of land that are designated for residential purposes AND any land on which there are one or more dwellings (including buildings which are being constructed).

It is payable on all transfers of property, not just on purchases – unless an exemption applies.

There are some exemptions for break-up of marriages, corporate reconstructions, partitions, deceased estates etc.

Normally when a person buys property "off the plan" in NSW, they are granted 12 months to pay stamp duty. However, where a foreign person buys property "off the plan", then the stamp duty must be paid within 3 month of exchange of contracts.

Where a foreign person purchases land jointly with a non-foreign person, then the surcharge duty is only charged on the proportion of the value that relates to the interest which the foreign person bought.



  • 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.


If a person was a foreign person at the time of entering into the contract for sale, but is not a foreign person at the time of completion of the transfer/settlement, it may be possible to apply for a refund of the surcharge duty.

This might occur where a Permanent Resident had only lived in Australia for less than 200 days at the time of signing an off-the-plan contract, but by the time it settled, they had met the 200 days requirement.