Note: We confirmed the below information with state government bodies but tax legislation is complicated and changes can occur. We recommend that you contact the government of the state that you’re buying in. If still in doubt, get financial advice from an accountant.
Foreign citizens who want to buy or invest in residential property in Victoria (VIC), New South Wales (NSW), Queensland (QLD) and South Australia (SA) will need to pay a stamp duty levy and, in some states, a land tax surcharge.
Try our stamp duty calculator to find out how much extra you’ll pay in stamp duty as a foreigner.
We’re experts at helping non-residents qualify for a home loan in Australia.
Please call us on 1300 889 743 or complete our free assessment form to discover if we can get you approved.
Who does the additional duty apply to?
The land transfer duty surcharge and extra land tax (select states only) applies to certain foreign purchasers and only in certain circumstances.
It can get really confusing so read on to find out more for your specific state.
This additional duty only applies in Victoria, New South Wales, Queensland and South Australia!
As yet, all other states and territories don’t apply a stamp duty or land tax levy.
Call us on 1300 880 743 (+61 2 9194 1700 if you’re outside Australia) or complete our free assessment form and we can let you know if you qualify for a foreigner mortgage.
You may be able to borrow up to 65% of the property value with some of our lenders!
Victoria foreign purchase additional duty (FPAD)
How much is the extra tax?
The SRO Vic began charging an additional duty of 3% of the property value for contracts signed between 1 July 2015 and 30 June 2016.
A 7% additional land transfer duty now applies to all property purchased from 1 July 2016 onwards.
This includes units and houses which have a portion of their value considered as land for tax purposes.
Increased stamp duty is the only surcharge that will apply.
However, the VIC government’s absentee owner surcharge or “ghost tax” on land tax increased from 0.5% to 1.5% on 1 January 2017.
This is an annual fee based on the value of the land you own in Victoria.
Prior to the additional stamp duty changes that came into effect on 1 July 2015, duty in Victoria was applied on a sliding scale
This kicked in at 1.4 per cent for properties valued at $25,000 and rose to 5.5 per cent for properties valued at $960,000 and above.
These rates still apply
Example
For an $800,000 property in Victoria, the normal stamp duty is $43,070.
For foreigners and certain visa holders, your stamp duty now shoots up to $99,070 for the same property. That’s $56,000 more!
When does it apply?
- You’re a foreign citizen or temporary resident (including a 457 visa holder). Exception is 444 visa holders.
- You’re buying residential or commercial property in the state of Victoria.
- You’re a New Zealand citizen on a Special Category Visa (subclass 444) and not in the country at the time of the contract exchange.
- You’re applying with a partner that doesn’t have Australian citizenship, PR or the special NZ visa, in which case they will have to pay stamp duty but only on their portion.
- You signed the Contract of Sale after 1 July 2015.
- Please refer to the State Revenue Office Victoria (SRO Vic) website for more information.
When doesn’t it apply?
- You’re an Australian citizen or a permanent resident.
- You’re a New Zealand citizen on a Special Category Visa (subclass 444) and in the country at the time of contract exchange.
- You’re buying the property in the name of the partner that is either an Australian citizen, permanent resident or 444 visa holder.
If you’re currently a temporary resident and not married to an Australian citizen, consider buying in a state that doesn’t apply extra stamp duty or wait until you become a permanent resident.
NSW surcharge purchaser duty
How much is the extra tax?
A 8% stamp duty surcharge and a 2% land tax surcharge applies.
In addition to this, foreign investors are no longer entitled to the 12-month deferral on the payment of stamp duty for off the plan purchases of residential property.
Example
Before the 1 July 2017 change, you would have paid $63,490 in stamp duty on an $800,000 property.
You’re now paying $95,767.60 which is a $64,000 increase.
When does it apply?
- You’re a foreign citizen or temporary resident (including a 457 visa holder). Exception is 444 visa holders.
- You’re buying residential property in the state of NSW. The surcharge doesn’t apply to commercial property.
- You’re applying with a partner that doesn’t have Australian citizenship, PR or the special NZ visa, in which case they will have to pay stamp duty but only on their portion.
- You signed the Contract of Sale after 21 June 2016, although this only for the stamp duty surcharge – a land tax surcharge also applies to purchases made from 1 January 2017.
- Please refer to the NSW Office of State Revenue website for more information.
When doesn’t it apply?
- You’re an Australian citizen, a NZ citizen on a special category 444 visa that has had their visa for at least 200 days or you’re a permanent resident that has had their PR for at aleast 200 days.
- You’ve been in the country for less than 200 days since getting your PR visa (or 444 visa) but you’re in the country at the time of contract exchange and settlement and declare to the OSR (via the Purchaser/Transferee Declaration form) that you will occupy the property for a continuous period of 200 days within the first 12 months of purchase.
- You’re buying the property in the name of the partner that is either an Australian citizen, permanent resident or 444 visa holder.
- You’re living in Australia on a partner visa (subclass 309 or 820) and you’ve been in the country for over 200 days.
- If you’re a first home buyer who is also a 444 visa holder or permanent resident. You qualify for the NSW stamp duty waiver subject to being in the country for at least 200 days by the time of the contract exchange.
If you’re currently a temporary resident and not married to an Australian citizen, consider buying in a state that doesn’t apply extra stamp duty or wait until you become a permanent resident.
Breaking down the 200-day exemption
To further explain the 200-day exemption for PR visa holders, you have a maximum of 165 days in which to move into the property.
After this, you must live in the property for a continuous period of 200 days (165 + 200 = 356 days).
You can avoid this requirement if you had been living in Australia for at least 200 days since receiving PR.
QLD additional foreign acquirer duty (AFAD)
How much is the extra tax?
A 3% stamp duty surcharge applies as well as a 1.5% ghost tax surcharge.
The absentee tax applies to individuals that you were away from Australia at 30 June 2017 or were away from Australia more than 6 months in total during the financial year before 30 June 2017.
If you were away during the 2017 financial year onwards, the QLD government will consider reasons for your absence and how long you spent in and out of the country.
In addition to this, the surcharge only applies to freehold land that has a total taxable value of $350,000 or more.
Please refer to the QLD government website for more specific guidance.
Example
Previously, your stamp duty would have been $21,850 on an $800,000 property.
You’re now paying $45,850 which is a $24,000 increase.
When does it apply?
- You’re a foreign citizen or temporary resident (including a 457 visa holder). Exception if you’re a 444 visa holder.
- You’re buying residential property in the state of Queensland. The surcharge doesn’t apply to commercial property.
- You’re applying with a partner that doesn’t have Australian citizenship, PR or the special NZ visa, in which case they will have to pay stamp duty but only on their portion.
- You signed the Contract of Sale after 1 October 2016.
- Please refer to the QLD Office of State Revenue website for more information.
When doesn’t it apply?
- You’re an Australian citizen, permanent resident or a New Zealand citizen on a Special Category Visa (subclass 444).
- You’re buying the property in the name of the partner that is either an Australian citizen, permanent resident or 444 visa holder.
If you’re currently a temporary resident and not married to an Australian citizen, consider buying in a state that doesn’t apply extra stamp duty or wait until you become a permanent resident.
SA additional foreign acquirer duty (AFAD)
How much is the extra tax?
A 7% stamp duty surcharge applies to contracts entered into on or after 1 January 2018.
To be clear, this surcharge is in addition to the stamp duty payable on the acquisition of an interest in residential land.
Please refer to the RevenueSA website for more specific guidance.
Example
Previously, your stamp duty would have been $37,996.50, including mortgage registration and transfer fees. for a $700,000 property in South Australia.
You’re now paying $86,996.50 which is a $49,000 increase.
When does it apply?
- You’re a foreign citizen or temporary resident (including a 457 visa holder). Exception if you’re a 444 visa holder.
- You’re buying residential property in the state of South Australia. The surcharge doesn’t apply to commercial property.
- You’re applying with a partner that doesn’t have Australian citizenship, PR or the special NZ visa, in which case they will have to pay stamp duty but only on their portion.
- You signed the Contract of Sale after 1 January 2018.
- Please refer to the RevenueSA website for more information.
When doesn’t it apply?
- You signed the contract of sale before 1 January 2018
- You’re an Australian citizen, permanent resident or a New Zealand citizen on a Special Category Visa (subclass 444).
- You’re buying the property in the name of the partner that is either an Australian citizen, permanent resident or 444 visa holder.
If you’re currently a temporary resident and not married to an Australian citizen, consider buying in a state that doesn’t apply extra stamp duty or wait until you become a permanent resident.
Are other states planning to introduce the higher duty?
In September 2017, the Western Australian government announced that it would be introducing a 4% foreign citizen surcharge on the purchase of new properties from 1 January 2019.
Apart from that, Tasmania (TAS), the Australian Capital Territory (ACT) and Northern Territory (NT) are free of the surcharge.
It’s unclear whether these states will follow suit purely because average property prices in these states are lower: the amount of revenue other states can expect to generate pales in comparison to QLD, NSW, VIC and, to a lesser extent, SA.
However, we expect that they will consider introducing it if the level of foreign investment increases.
Why did NSW, VIC, QLD and SA do this?
When explaining its reason for introducing the higher duty, the Victorian government said that it was only fair that foreign investors pay their fair share to fund government services and infrastructure.
QLD, NSW and SA made similar announcements, with figures of up to $1 billion in revenue-raising being bandied about.
Most foreign investors aren’t fazed by the higher costs of buying a property and investment is still strong.
When can I apply for FHOG after getting PR?
Waiting for PR in order to avoid the foreign citizen stamp duty?
You can apply for a first home owners grant (FHOG) with your state right away as long as you can provide evidence of your Permanent Residency certificate or Permanent Resident visa.
Find out when to apply for the FHOG during the home buying process and when you will receive payment from your state revenue office by checking out the first home owners grant guide page.
Do you need a non-resident mortgage?
Are you a foreign citizen, permanent resident, temporary resident or New Zealand citizen in need of a mortgage?
The Australian government has long had a love/hate relationship with foreign investors and rules and regulations for buying real estate change on a regular basis.
This also extends to bank and lender policy, from how much you can borrow to what type of non-residents can actually qualify for a mortgage.
Not all lenders are the same!
We’re experts in non-resident mortgages and can navigate this policy minefield so you have the best chance of qualifying for a mortgage in Australia!
Call us on 1300 889 743 (+61 2 9194 1700 if you’re outside Australia) or fill in our free assessment form to speak with one of our mortgage brokers.
