Most Australian jurisdictions have introduced foreign surcharge duty on foreign purchasers who acquire residential land and surcharge land tax for foreign landholders on most landholdings (Victoria and Queensland) and residential landholdings (New South Wales (NSW), the Australian Capital Territory (ACT) and Tasmania). Foreign surcharges are payable in addition to ordinary stamp duty and land tax. Victoria and Queensland offer exemptions from the foreign surcharges for certain large organisations that make a significant contribution to the respective Victorian and Queensland local economies.
We outline in this article the foreign surcharges that are payable and the foreign surcharge land tax exemptions that are potentially available in Victoria and Queensland. Your organisation may also be eligible for an exemption from foreign surcharge duty, however, we have not considered this in this article.
Between 1 July 2015 and 1 January 2019, all Australian states introduced surcharges to impose additional stamp duty on foreign purchasers of residential land. The ACT and the Northern Territory (NT) do not impose foreign surcharge duty. Tasmania also imposes foreign surcharge duty on acquisitions of primary production land. Foreign surcharge duty is imposed at rates of between 1.5%–8%, depending on the type of land and the jurisdiction.
In addition, Victoria, NSW, Queensland, Tasmania and the ACT have all introduced a foreign surcharge land tax which is payable in addition to land tax. In the ACT, NSW and Tasmania, this surcharge is generally only imposed in relation to residential landholdings. However, in Victoria and Queensland it applies to broader categories of land. This is imposed at rates of 0.75%–4%, depending on the jurisdiction.
The table below outlines the type of land that is subject to a surcharge and the current rates imposed by each jurisdiction.
Foreign surcharge purchaser duty
Foreign surcharge land tax
8% (residential land)
4% (all land over the relevant threshold)
4% (residential land)
7% (residential land)
2% (freehold land > $350,000)
8% (residential land) and 1.5% (primary production land)
2% (residential land)
0.75% (residential land)
In Victoria and Queensland, an exemption may be available for organisations that make a significant contribution to the relevant state economy. It is necessary to gather relevant information and documents and then make a formal application to the applicable revenue authority.
We outline some of the relevant criteria to be considered in applying for the exemption in Victoria and Queensland.
Who is liable to pay foreign land tax surcharge in Victoria?
In Victoria, foreign land tax surcharge is payable by an absentee owner. This includes a natural person absentee, an absentee corporation or a trustee of an absentee trust. This is known as absentee owner surcharge.
An absentee corporation is defined to mean a corporation that is incorporated outside Australia or a corporation in which an absentee person has an absentee controlling interest. A person has an absentee controlling interest in a company if the absentee person, or that person acting together with another absentee person:
Is an exemption from absentee owner surcharge available?
The Victorian Government offers an exemption from foreign surcharges, including the absentee owner surcharge, for certain absentee corporations and absentee trusts that:
If an exemption is granted, the landowner will not have to pay the absentee owner surcharge. All other land taxes are still payable.
The Treasurer has released guidelines which outline the factors to be considered in granting an exemption. These include:
Note: there are specific criteria for absentee owners that undertaken commercial activities involving property development, including how the exemption applies in relation to build-to-rent projects;
Note: consideration will also be given to the corporate behaviour of other entities in which directors and shareholders of the absentee corporation have an interest.
What documents need to be provided to support the exemption?
Taxpayers applying for the exemption need to provide the State Revenue Office with various supporting materials including:
Does the exemption apply retrospectively?
No. The exemption will only apply from the date the relief is granted.
Who is liable to pay land tax foreign surcharge in Queensland?
Foreign companies, trustees of foreign trusts and foreign persons may have to pay a land tax foreign surcharge. A foreign company is defined to include a corporation incorporated outside Australia or a corporation in which foreign persons have a controlling interest.
Foreign persons have a controlling interest in a company if the foreign person or related persons of the foreign person:
Is an exemption from land tax foreign surcharge available in Queensland?
The Queensland Government offers ex gratia relief from the land tax foreign surcharge on a case-by-case basis. If relief is granted, it will apply to all land owned by the foreign entity in Queensland.
The Queensland Revenue Office has release public ruling LTA00.4.2 which outlines the conditions that must be met to be eligible for ex gratia relief. This includes:
Note: there are specific rules for foreign entities whose commercial activities involve property development.
The required documents include:
Yes. In Queensland, taxpayers can apply for ex gratia relief retrospectively (up to five years) provided they can demonstrate they met the conditions at the time the liability for the foreign surcharge arose.
We can assist you to determine whether a foreign surcharge is payable and to apply for an exemption if your organisation is eligible.
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