Australia Stamp Duty and Surcharge for Foreign Buyers

Australia Stamp Duty and Surcharge for Foreign Buyers

Australia Stamp Duty and Surcharge for Foreign Buyers

Since foreign buyers are also benefiting from the use of public utilities and property, Australian States deemed it necessary to impose additional fees. It is also one way to reduce the surge of foreign buyers into the country. Many investors are not fuzzed about this surcharge though, as they believe the benefits far outweigh the costs.

The foreigner stamp duty applies upon transfer of property ownership, which means purchase of property is counted. Stamp duty, land tax and surcharge varies per state.

The following are the stamp duties levied per state:

Victoria Stamp Duty and Foreigner Surcharge
New South Wales Stamp Duty and Foreigner Surcharge
Australian Capital Territory Stamp Duty and Foreigner Surcharge
Queensland Stamp Duty and Foreigner Surcharge
South Australia Stamp Duty and Foreigner Surcharge
Western Australia Stamp Duty and Foreign Surcharge
Tasmania Stamp Duty and Foreign Surcharge
Northern Territory Stamp Duty and Foreign Surcharge


Victoria Stamp Duty and Foreigner Surcharge

Victoria makes use of a sliding scale to compute land transfer tax. The table below shows the base tax that everyone who purchases or transfers real estate property must pay. The maximum rate is 5.5% if the property is AUD $960,000 or more, and a minimum rate is 1.4% if the property is worth less than AU $25,000.

Victoria Stamp Duty Computation

Property ValueStamp Duty
$25,000 or less1.4%
$25,001 to $130,000$350 + 2.4% in excess of $25,000
$130,001 to $440,000$2,870 + 5% in excess of $130,000
$440,001 to $550,000$18,370 + 6% in excess of $440,000
$550,001 to $960,000$28,070 + 6% in excess of $550,000
$960,001 and above5.5% of the property value

Victoria’s foreign investors stamp duty or FPAD, which is applicable to foreign investors and temporary residents, is 7% for purchases made on the first of July 2016 and thereafter. This applies to temporary residents except for 444 visa holders. If you are purchasing the property with somebody else who is not a foreign national or a temporary resident, you will only have to pay 7% of your portion of the property. Remember that this is on top of the regular land tax (refer to table above).

However, you can be exempt from paying additional duty if you purchase the residence with an Australian citizen, a New Zealand citizen or a permanent resident and the property becomes your principal place of residence (PPR) for a year, beginning from when the property has been acquired. This exemption is valid for purchases from June 14 2018 and after.

Stamp duty must be paid within 30 days of property acquisition. For more details on Victoria, Australia Stamp Duty, refer to Victoria’s State Revenue Office website.


New South Wales Stamp Duty and Foreigner Surcharge

Similar to Victoria, New South Wales utilizes a sliding scale for the stamp duty. The table below displays the basic stamp duty.

Property ValueStamp Duty
$0 to $14,000$1.25 for every $100 worth of property
$14,001 to $30,000$175 + $1.50 for every $100 in excess of $14,000
$30,001 to $80,000$415 + $1.75 for every $100 in excess of $30,000
$80,001 to $300,000$1,290 + $3.50 for every $100 in excess of $80,000
$300,001 to $1m$8,990 + $4.50 for every $100 in excess of $300,000
$1m to $3m$40,490 + $5.50 for every $100 in excess of $1,000,000
Premium Property Duty: over $3m$150,490 + $7.00 for every $100 in excess of $3,000,000

NSW refers to their additional foreign stamp duty as Surcharge Purchaser Duty. This duty is only applicable to residential property purchases, not commercial ones. Starting purchases or property transfer from July first of 2017, the surcharge purchaser duty has increased to 8%. Land tax duty which is a separate element has also increased to 2%.

Also, foreign persons are no longer allowed to defer stamp duty payment for 12 months. Foreign individuals liable for this surcharge stamp duty are classified as those who possess temporary visa. If you hold a permanent visa and you have been in Australia for 200 days in the past 12 months, you can be exempt from this duty. If you did not live in Australia for at least 200 days the past year, you can still get the 200-day exemption if you move in to the residence within 165 days since purchased. You then need to live there for 200 consecutive days afterwards.

According to NSW regulations, a Purchaser-Transferee Declaration must be made. Individuals can use ODA 076 I. The duty is payable within three months of property transfer. If only a portion of the land or property will be used for residential purposes, then only that portion will have to be paid for duties.

 


Australian Capital Territory Stamp Duty and Foreigner Surcharge

The table below displays the base non-commercial duty rate for purchases made in Australian Capital Territory starting June 6, 2018.

Property ValueStamp Duty
$200,000 or less$2.30 for every $100 worth of property value, for a minimum of $20
$200,001 to $300,000$2,600 + $2.30 for every $100 in excess of $200,000
$300,001 to $500,000$4,900 + $3.60 for every $100 in excess of $300,000
$500,001 to $750,000$12,100 + $4.56 for every $100 in excess of $500,000
$750,001 to $1,000,000$23,500 + $6.10 for every $100 in excess of $750,000
$1,000,001 to $1,455,000$38,750 + $6.60 for every $100 in excess of $1,000,000
$1,455,001 or moreA flat rate of $4.73 per $100 of property value

The tax surcharge for foreign buyers in ACT is not as big as in other states. Also, it is called Conveyance Duty here. The additional land tax that will be charged is 0.75% for Contract of Sale dated the first of January 2019. This tax is not applicable to commercial properties and mixed used properties. If you buy at least 10 residential properties, you will also be exempt from this duty.

Australia Stamp Duty and Surcharge for Foreign Buyers


Queensland Stamp Duty and Foreigner Surcharge

Queensland is one of the states in Australia that attracts a lot of foreign investors. For this reason, QLD’s foreign buyer surcharge is one of the highest. Stamp duty must be paid within 30 days of the purchase. The base stamp duty that everyone needs to pay for is as follows:

Property ValueStamp Duty
$5,000 or lessNo duty
$5,000 to $75,000$1.50 for every $100 in excess of $5,000
$75,000 to $540,000$1,050 + $3.50 for every $100 in excess of $75,000
$540,000 to $1,000,000$17,325 + $4.50 for every $100 in excess of $540,000
$1,000,000 or more$38,025 + $5.75 for every $100 in excess of $1,000,000

Stamp duty for foreign buyers in Queensland is referred to as the Additional Foreign Acquirer Duty (AFAD). The additional duty is 7%, and 25% land tax. Queensland also utilizes 1.5% Ghost Tax. Ghost Tax is charged when a residential home is unoccupied for 6 months or more per year. This encourages home owners to actually use the home and prevent investors from buying a second home that is not being made available for use by Australian citizens.

Just like with ACT, QLD requires this tax for residential property only. Also these increased stamp duty is only charged for properties purchased the first of October 2016. It also applies to properties with a value of more than $350,000.

 


South Australia Stamp Duty and Foreigner Surcharge

In South Australia, stamp duty is payable for both residential land and primary production land (plus improvements, such as homes and buildings). Commercial and industrial lands are exempt. The base rates for stamp duty are SA conveyance rates, as shown in the table below:

Property ValueStamp Duty
$12,000 or less$1.00 for every $100
$12,000 to $30,000$120 + $2.00 for every $100 in excess of $12,000
$30,000 to $50,000$480 +$3.00 for every $100 in excess of $30,000
$50,000 to $100,000$1,080 + $3.50 for every $100 in excess of $50,000
$100,000 to $200,000$2,830 + $4.00 for every $100 in excess of $100,000
$200,000 to $250,000$6,830 + $4.25 for every $100 in excess of $200,000
$250,000 to $300,000$8,955 + $4.75 for every $100 in excess of $250,000
$300,000 to $500,000$11,330 + $5.00 for every $100 in excess of $300,000
$500,000 or more$21,330 + $5.50 for every $100 in excess of $500,000

Beginning from purchases made in January 1, 2018 and forward, South Australia added a foreigner’s surcharge they called Foreign Ownership Surcharge. The surcharge is equivalent to 7% of the property’s value. If in any case the foreign person becomes a permanent visa holder in the next 12 months after the property has been purchased, he or she can get a refund of the Foreign Ownership Surcharge.


Western Australia Stamp Duty and Foreign Surcharge

Stamp duty is Western Australia is applicable for both commercial and residential properties, although the rates are different. The transfer duty rates for residential properties are as follows:

Property ValueStamp Duty
$120,000 or less$1.90 for every $100
$120,001 – $150,000$2,280 + $2.85 for every $100 in excess of $120,000
$150,001 – $360,000$3,135 + $3.80 for every $100 in excess of $150,000
$360,001 – $725,000$11,115 + $4.75 for every $100 in excess of $360,000
$725,001 or more$28,453 + $5.15 for every $100 in excess of $725,000

Western Australia’s Foreign Citizen Stamp Duty is currently at 4%. However, it is set to increase to 7% for purchases made on the first of January 2019 and forward. Also, if you are sharing this property with an Australian citizen, a New Zealand citizen or a permanent resident, you only have to pay foreign surcharge duty for your portion.


 

Tasmania Stamp Duty and Foreign Surcharge

In Tasmania, property transfer duties must be paid for any purchase of any of the following:

  • Gifts and inheritance
  • Easement and covenants
  • Shares
  • Vacant land
  • Residential property

The base stamp duty in this state is shown in the table below.

Property ValueStamp Duty
$3,000 or less$50
$3,001 to than $25,000$50 + $1.75 for every $100 in excess of $3,000
$25,001 to $75,000$435 plus $2.25 for every $100 in excess of $25,000
$75,001 to $200,000$1,560 plus $3.50 for every $100 in excess of $75,000
$200,001 to $375,000$5,935 plus $4.00 for every $100 in excess of $200,000
$375,001 to $725,000$12,935 plus $4.25 for every $100 in excess of $375,000
$725,001 or more$27,810 plus $4.50 for every $100 in excess of $725,000

The stamp duty surcharge being imposed in Tasmania is called Foreign Investor Duty Surcharge (FIDS). This duty is charged to purchased that happened on or after the first of July 2018. A foreign buyer must complete and submit the Foreign Investor Acquisition Statement.


Northern Territory Stamp Duty and Foreign Surcharge

Unlike other states whose rates calculation increase based on the value of the property, Northern Territory’s stamp duty is based on just three calculations. The following table displays the base stamp duty in NT.

Property ValueStamp Duty
$525,000 or lessSD = (0.06571441 x PV²) + 15PV
Where SD = the duty payable in
and
PV = the property value divided by 1000
$525,001 to $3,000,0004.95%
$3,000,000 or more5.45%

Source iSelect

Foreign investors will be happy to know that there is no stamp duty surcharge for foreigners in the Northern Territory. There is also no news of the land tax increase in this state so it would be the best place to buy if you have a not-so modest budget.


 

If you’re interested in buying residential property in Australia, you would need someone to assist you with the ins and outs of Australian regulations. It can be complicated, but it can be made easy with the help of a professional. Whether you need a buyer’s agent or a mortgage broker, we can help you. Just send us a message and we’ll get in touch.