Thinking | 15 March 2018

NSW Foreign Person Surcharge Duty and Surcharge Land Tax

On 5 March 2018, legislative provisions came into effect which give concessions from NSW foreign person surcharge duty and surcharge land tax. These concessions were previously announced in the 2017-18 New South Wales budget.

As of 5 March 2018, the rate of foreign person surcharge duty in New South Wales was 8% and the rate of surcharge land tax was 2%.

These concessions apply to Australian-based developers who are Australian corporations that otherwise qualify as “foreign persons”, including corporations acting as trustees.

These changes allow for both refunds of amounts previously paid and an exemption for future amounts otherwise payable relating to residential land in NSW where the land is:

  • used for the construction and sale of new homes or
  • is subdivided and sold for the purposes of the construction and sale of new homes.

Generally, the application for refund must be made within 12 months after completion of the sale of new home or issue of subdivision certificate but no later than 10 years after the transfer of the land to the Australian corporation. If completion of the transfer to the Australian corporation occurred before 21 June 2016, an application for refund of surcharge land tax must be made before 21 June 2021.

The provisions operate retrospectively so that a refund can be available for both transfers that occurred before 5 March 2018 and transfers that occur on or after 5 March 2018. Likewise, a refund of surcharge land tax can be available in respect of the 2017 land tax year and subsequent tax years.

Australian-based developers who have paid NSW foreign person surcharge duty or surcharge land tax should consider whether they would qualify for a refund.

Alternatively, Australian-based developers who may have to pay the NSW foreign person surcharge duty or surcharge land tax, should consider applying for an exemption prior to paying that duty or land tax. If the exemption is given then it will also apply for future transfers of land and future land tax years.

Key next steps

If you or your client are an Australian-based company who is a “foreign person” and have or may develop land for construction of new homes, then you or your client may be eligible for a refund of or exemption from any NSW foreign person surcharge duty and surcharge land tax and should seek further advice.


Oliver Jankowsky

Partner & Head of International Practice

Ed Paton

Partner & Head of SE Asia Practice

Eugene Chen

Partner & Head of China Practice

Melanie Smith

Director - Business Development, Marketing and Communications

Natalie Bannister

Partner & Commercial National Practice Leader

Rhett Slocombe

Partner & Insurance National Practice Leader

Katie McKenzie


James Bull

Special Counsel and Head of Frank

Melanie James

People & Culture Manager

Jacqui Barrett

Partner & Head of US Practice

Paul O’Donnell

Consultant & Head of Energy

Christopher Brown

Partner & Head of UK Practice

Lauren Parrant

Senior People & Culture Advisor, as at 1 July 2022

Melinda Woledge

Marketing & Communications Manager

Jasmine Koh

Senior Associate and Head of Frank

Alison Choy Flannigan

Partner & Leader, Health & Community

Billie Kerkez

Manager – Smarter Recovery Solutions

Peter Jones

Senior Commercial Counsel

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