The Land Tax Surcharge is an additional tax imposed on foreign persons who own residential land in New South Wales (NSW).

Here are the key details:

• Applicability:
  • The surcharge is specifically for foreign persons who own residential land in NSW.
  • It is charged in addition to any regular land tax that the property owner may already be paying.
  • Even if a foreign owner does not owe the standard land tax, they may still be required to pay this surcharge.

• Definition of a Foreign Person:
  • You are generally considered a foreign person unless:
    • You are an Australian citizen, or
    • You have lived in Australia for 200 days or more in the 12 months prior to the taxing date of 31 December and are a permanent resident of Australia.
• Taxing Date:
  • The surcharge is assessed based on the taxable value of all residential land owned as at 31 December each year.

• No Tax-Free Threshold:
  • Unlike standard land tax, there is no tax-free threshold for the foreign owner surcharge. This means the surcharge applies to the entire taxable value of the residential land.
• Surcharge Rate:
  • Starting from the 2023 land tax year, the surcharge rate is 4% of the taxable value of the residential land.

By understanding these points, foreign owners of residential land in NSW can better navigate their tax obligations and ensure compliance with local regulations.