Significant changes to NSW to Surcharge Duty and Surcharge Land Tax
On February 21, 2023, Revenue NSW (RNSW) announced significant modifications to the surcharge purchaser duty and surcharge land tax in New South Wales. The NSW surcharge regulations have been found to be inconsistent with tax treaties established by the Australian Federal Government with New Zealand, Finland, Germany, and South Africa.
Accordingly, RNSW has declared that citizens of these four nations who purchase residential-related property or land in their own capacity will no longer be obligated to pay surcharge purchaser duty or surcharge land tax in NSW, effective immediately. Furthermore, entities like corporations, trusts, or partnerships affiliated with these nations may also be exempted from paying surcharge purchaser duty or surcharge land tax in NSW.
Refunds may be available to purchasers/transferees and landowners from the aforementioned countries who paid surcharge purchaser duty or surcharge land tax on or after July 1, 2021, due to the changes.
If you are a citizen of New Zealand, Finland, Germany, or South Africa and have paid surcharge purchaser duty or land tax in NSW, you may be eligible for a refund. Although RNSW will actively identify those eligible for a refund, we recommend that individuals who previously paid surcharge purchaser duty or surcharge land tax consider their potential entitlement to a refund and contact RNSW.
Similarly, non-individual entities like corporations, trusts, or partnerships may be eligible for a refund if they were classified as foreign persons solely due to a substantial interest (or an aggregate substantial interest) held by a person from one of the aforementioned four countries. We also recommend that these entities assess whether they are eligible for any potential refunds.
No other jurisdiction has yet confirmed whether they will implement similar modifications to their regimes publicly. We will continue to monitor this situation and provide updates as necessary.
If you wish to discuss the above in more detail or believe it is pertinent to your client, please contact us.