Foreign Buyer Stamp Duty And Land Tax Surcharges In NSW: What You Need To Know

Foreign purchasers, permanent residents, and those buying through corporate or trust structures face additional stamp duty and land tax obligations in NSW that go well beyond the standard rates. Following the NSW 2024-25 State Budget, both the surcharge purchaser duty and the surcharge land tax rates were increased again from 2025, making it more important than ever to understand exactly what applies to your situation before contracts are exchanged.

Revenue NSW has access to customs and border control records and is actively auditing property transactions for compliance. Getting this wrong is costly – and avoidable with the right advice upfront.

Standard Stamp Duty in NSW

Every purchaser of property in NSW is required to pay stamp duty (now formally known as transfer duty). The amount is calculated based on the purchase price on a sliding scale, ranging from 1.25% to 5.5%, with a 7% premium applying to any amount above the premium duty threshold. Please note the premium duty threshold is subject to periodic adjustment by Revenue NSW and should be confirmed at the time of your transaction via the Revenue NSW transfer duty page.

Surcharge Purchaser Duty for Foreign Buyers

Foreign purchasers buying residential property in NSW are required to pay surcharge purchaser duty in addition to the standard transfer duty outlined above. This is the stamp duty surcharge that applies specifically to foreign buyers, and it is calculated on the full purchase price of the property.

From 1 January 2025, following the NSW 2024-25 State Budget, the rate of surcharge purchaser duty increased from 8% to 9%. To illustrate the impact: for a property purchased at $1,000,000, the stamp duty for foreign buyers in NSW now includes a surcharge of $90,000 on top of the standard transfer duty already payable. This is a high additional cost that must be factored into any purchase budget.

There is also an important update for citizens of certain countries. Previously, citizens of New Zealand, Finland, Germany, India, Japan, Norway, South Africa, and Switzerland were exempt from surcharge purchaser duty under international tax treaties. That exemption no longer applies for contracts entered into on or after 8 April 2024. Citizens of these countries purchasing residential property in NSW are now liable for the surcharge at the current rate of 9%.

For current rates and eligibility information, refer to the Revenue NSW surcharge purchaser duty page.

The 200-Day Rule for Permanent Residents

Permanent residents are generally treated in the same way as Australian citizens for stamp duty purposes – but there is an important qualification that is frequently overlooked.

If you hold a permanent resident visa and were not present in Australia for at least 200 days in the 12 months before you enter into a contract to purchase property, your permanent residency is effectively discounted for surcharge purposes. In that situation, you will be treated as a foreign purchaser and required to pay a surcharge purchaser duty at 9% on top of the standard transfer duty already payable. On a $1,000,000 purchase, that represents an additional $90,000 in stamp duty for the permanent resident who does not meet the 200-day requirement.

There is one avenue for relief. If you were not present in Australia for 200 days in the year before your purchase, you can apply for an exemption on the basis that you will be present in Australia for at least 200 days in the 12 months following the date of the purchase.

The 200-day rule applies to both surcharge purchaser duty and surcharge land tax. For full eligibility criteria, refer to the Revenue NSW guidance on surcharge purchaser duty for individuals.

Purchasing Through a Company or Trust

It is important to note that the surcharge purchaser duty does not only apply to individual foreign buyers. If you are purchasing through a company or trust – even one that is registered or established in Australia – more than 20% foreign ownership of that entity (by shareholders or unit holders) will cause the company or trust to be treated as a foreign entity, and the surcharge will apply to the purchase.

This is a common and costly oversight. Any person acquiring residential property in NSW through a corporate or trust structure with any foreign ownership should take specific legal advice before proceeding.

Surcharge Land Tax for Foreign Property Owners

Land tax is an annual payment made to Revenue NSW on the unimproved value of land owned in NSW, subject to certain exemptions including your principal place of residence. The standard rate is 1.6% on the aggregate unimproved land value above the general threshold (currently $1,075,000, frozen at its 2024 level) and 2% above the premium threshold of $6,571,000.

If you are a foreign person who owns residential property in NSW, you will also be liable to pay surcharge land tax on top of any land tax otherwise payable. This surcharge applies even to property that would otherwise be exempt from standard land tax – including your principal place of residence. A person in Australia on a temporary working visa who owns the home they live in, for example, remains liable for the surcharge.

From the 2025 land tax year, following the NSW 2024-25 State Budget, the rate of surcharge land tax increased from 4% to 5% on the full unimproved land value of the property, with no tax-free threshold applying.

To illustrate the impact at the current rate: if your property’s unimproved land value is $400,000, the annual surcharge land tax liability would be $20,000. If the unimproved land value is $900,000, the annual liability would be $45,000. These amounts are payable each year, regardless of whether any standard land tax applies to the property.
The 200-day rule applies to surcharge land tax in the same way it applies to surcharge purchaser duty. Permanent residents who do not meet the 200-day presence requirement will be treated as foreign persons for land tax purposes.

For current rates, calculation examples, and exemption information, refer to the Revenue NSW surcharge land tax page.

Self-Reporting and Revenue NSW Audits

If you believe your stamp duty or land tax has been incorrectly calculated and that the foreign surcharge should have applied, it is strongly advisable to self-report to Revenue NSW before the matter is identified in an audit. Revenue NSW has access to customs and border control records and is actively auditing property transactions to identify errors and omissions. Self-reporting an error before it is discovered significantly improves the likelihood of penalties and interest being reduced or waived. Where Revenue NSW identifies the error first, the financial consequences are likely to be considerably more significant.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.