From 31 December 2016 for the 2017 and subsequent land tax years, a land tax surcharge of 0.75% will also apply to foreign persons owning residential property in New South Wales.
Foreign persons will not be provided with a tax-free threshold for the land tax surcharge nor an exemption for their principal place of residence.
- The land tax surcharge applies from 2017 tax year with liability determined for that year at midnight 31 December 2016
- Determination of whether a person or entity is a foreign person is made on 31 December each year
- The Land Tax surcharge payable on portion of land owned by a foreign person (including companies and trusts)
- No tax free threshold
- No principal place of residence exemption
Example
| A principal place of residence is owned by individuals A and B, 50% each |
|
· A is a foreign person · Land value = $400,000 · No land tax payable · But surcharge land tax is payable on 50% of the land value · Surcharge land tax is $200,000 x 0.75% = $1,500 |
NB The information contained in this article (and its contents) is general information only and should not to be considered as legal advice.
Penny Browne Conveyancing