NSW Land Tax Surcharge - Non Tax Residents !
Although the Non Tax Resident (NTR) surcharge has been in place for little over a year now, we still get asked the question "How does this relate to me ?". So worthy of a blog i think !
The essence of the tax is that Foreign persons who own residential land in NSW must pay a surcharge of 2% from the 2018 land tax year on wards. The surcharge applies on the taxable value of all residential land owned as at 31 December each year, including their principal place of residence. A registration form must be submitted by 31 March 2017 if you are liable for land tax. More here. It is in addition to any land tax already paid and may be required even if they do not pay land tax. It is also proportional to ownership and there is no tax-free threshold.
This change was initially announced at the NSW Government’s 2016 budget, which also introduced a 4% foreign investor transfer duty surcharge now 8%. More here . The changes have been forecast to generate more than $1 billion in revenue over four years to 2019-20, with $166 million from land tax. Who is a foreign person? According to the NSW Office of State Revenue an individual who is not an Australian citizen, is a foreign person, if they are not ordinarily resident in Australia. The second part touches on residency principles around where one resides or not "ordinarily resident in Australia", this may follow tax residency status on a federal basis and follow the ATO's views on this area. It added that a foreign person can be:
an individual
a corporation
a trustee of a trust
a beneficiary of a land tax fixed trust
a government
a government investor
a partner in a limited partnership.
For more information and definitions on who is a foreign person, visit the Office of State Revenue website here.
If you are unsure if you are a foreign person (not such a silly question) and need some assistance in determining your land tax obligations and/or need some tax planning assistance in this area, you can contact this office on (02) 8005 0380 or contact@ignitefs.com.au