Foreign Ownership Surcharge
From 1 January 2018 foreign purchasers of residential land are required to pay a 7% surcharge in addition to stamp duty being paid at settlement.
Who is classed as a foreign purchaser?
A foreign person is someone who is NOT an Australian citizen or a holder of a permanent visa. New Zealand citizens who do NOT hold a special category visa are also deemed a foreign person.
How is the surcharge calculated?
This surcharge is calculated on the value of land being acquired. For example, if a husband and wife are purchasing a home and the husband is an Australian citizen and the wife is a foreign person, the surcharge will be calculated on 50% of the purchase price.
What evidence is required?
In our Verification of Identification process, if a purchaser presents a foreign passport we will require them to provide evidence of their residency status (being a Visa granted by the Australian Government). Most purchasers to date have fallen into the Australian residency category and have had evidence readily available.
However, if a purchaser is not an Australian resident and still wishes to go ahead with the purchase of land, the 7% surcharge will be paid at settlement together with the stamp duty to Revenue SA.
What if the foreign purchaser becomes an Australian Citizen or is granted a permanent visa after settlement?
If a foreign purchaser acquires land and becomes an Australian citizen or is granted a permanent visa within 12 months of the transaction, they can apply directly to Revenue SA for a refund of the surcharge they paid at settlement in full.
If you would like more information on the surcharge, contact the friendly team at Tuckfield Conveyancing on 08 8344 3448.
Article written by Miriam Errington | Hero Image by Pexels
Please note that the information contained in this article is of a general nature only and does not constitute legal advice. Tuckfields does not take responsibility for any errors or omissions obtained from the use of this information.