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NSW surcharge purchaser duty and surcharge land tax – new concessions

In recent years, the New South Wales Government introduced surcharges to land tax and purchaser duty payable by "foreign persons". The rate of surcharge purchaser duty is presently 8 percent, while land tax is 2 percent.

Previously announced concessions for Australian-based developers who meet the definition of "foreign persons" came into effect on 5 March 2018.

Obtaining a refund

Australian corporations can now apply for a refund of the surcharge purchaser duty or land tax if the land has been:

  • used for the construction and sale of new homes and sold without being used or occupied for any purpose, except as a display home, or
  • subdivided and sold for the purposes of new home construction after a subdivision certificate is obtained.

Importantly, sales cannot be to an associate of the Australian corporation.

Any application for a refund must be made within 12 months of the completion of the sale or issue of the subdivision certificate, and within 10 years of the completion of the original transfer of the residential land. Any purchases which settled before 21 June 2016 are subject to a five year time limit, so refund applications must be lodged before 21 June 2021.

Because the provisions are retrospective, any Australian-based developer who has paid the surcharge duty or land tax should investigate whether they are eligible for a refund.

Exemption for corporations

The new provisions also allow an Australian corporation to apply for exemption from prospective obligations to pay surcharge purchaser duty and surcharge land tax. The exemption may cover a particular development or future acquisitions of land. Obtaining an exemption avoids the negative impact on project cash flow from outlaying funds at settlement, and waiting until completion of the project before seeking a refund. It is particularly useful for corporations which regularly undertake developments in New South Wales.

The Chief Commissioner will consider matters such as the following when deciding whether to grant an exemption—

  • the corporation's involvement in new home construction or subdivision of land for new home construction
  • its future plans for new home construction or subdivision of land, as evidenced by corporate plans, prospectuses, annual reports and the like
  • Foreign Investment Review Board approvals to purchase real estate
  • development timetables
  • finance approvals
  • relevant development approvals, including construction certificates, subdivision plans, development certificates, subdivision certificates and strata certificates.

An exemption can be conditional or it can be revoked where disqualifying conduct occurs.

If you would like to explore your eligibility to seek a refund or an exemption, please contact a member of our Real Estate team.


Selina Nutley

Selina Nutley


Contact McMahon Clarke

T +61 7 3239 2900
A Level 7, 100 Creek Street, Brisbane Qld 4000