If you are a foreign purchaser and about to buy a property, you may need to pay a surcharge. Since January 2018, the ‘Foreign Ownership Surcharge’ applies to all temporary residents.
To understand more on how this will impact you, we have a brief run down below.
Firstly, what does the ‘Foreign Ownership Surcharge’ mean?
Any person classed as a foreign purchaser, will need to pay a stamp duty surcharge. This is additional to the stamp duty charged by Revenue SA and applies if buying as an individual or a non-individual.
What purchases apply?
The surcharge applies to any residential purchase, including vacant land and investment properties. If the property is commercial or used for commercial purposes, then it won’t apply.
If there is a transaction which is exempt from stamp duty, the surcharge will not apply.
Are you a foreign purchaser?
If you are not an Australian Citizen, or hold a permanent visa, then you are a foreign purchaser. A New Zealand Citizen without the special category visa is also a foreign purchaser. As well as a Corporation or Trust which has not been set up under Australian jurisdiction.
How much is the surcharge for a foreign purchaser?
The surcharge is 7% of the value of the interest being purchased by the foreigner.
If a person or entity becomes a temporary resident within 3 years after the settlement of a property, they must notify the Revenue SA Commissioner, who will impose the surcharge.
This is a great example of why you need to discuss everything with your Conveyancer as soon as possible so they can inform you of charges such as this. Finding out only a few days prior to settlement could be a disaster and could quite possibly lead to a settlement delay – which nobody wants!
More information is on the Revenue SA website. If you have any other questions, please feel free to contact our office.