On 21 February 2023 Revenue NSW (RNSW) announced significant changes to surcharge purchaser duty and surcharge land tax in NSW. It has been determined that NSW surcharge provisions are inconsistent with international tax treaties entered into by the Australian Federal Government with New Zealand, Finland, Germany and South Africa.
RNSW has announced that effective immediately, individuals that are citizens of New Zealand, Finland, Germany and South Africa purchasing residential-related property or land in their own capacity will no longer be required to pay surcharge purchaser duty or surcharge land tax in NSW. In addition, entities such as corporations, trusts or partnerships that are affiliated with these nations may also not be required to pay surcharge purchaser duty or surcharge land tax in NSW.
Given the changes, refunds may be available for purchasers/transferees, and landowners, from the nations concerned who paid surcharge purchaser duty or surcharge land tax on or after 1 July 2021.
For those individuals that are citizens of either New Zealand, Finland, Germany and South Africa and have paid either surcharge purchaser duty or land tax in NSW you may be eligible for a refund. Whilst we note that RNSW has stated that they will actively identify those that are eligible for a refund, we recommend that any individuals who have previously paid either surcharge purchaser duty or surcharge land tax consider their potential entitlement to a refund and actively engage with RNSW.
Non-individual entities such as corporations, trusts or partnerships may also be entitled to a refund if they have been deemed foreign persons solely by reason of a substantial interest (or an aggregate substantial interest) being held by a person from New Zealand, Finland, Germany or South Africa. Once again, we recommend that these types of entities consider whether they are entitled to any potential refunds.
As yet, no other jurisdiction has publicly confirmed whether similar changes will be implemented to their regimes. We will continue to monitor this space and provide comment should any developments arise.
If you would like to discuss the above further or think it is relevant to your client, please contact your local BDO tax adviser.