A land tax surcharge of 0.75% of the taxable value of residential land owned by a foreign person has commenced on 31 December, 2017. This is in addition to the 4% stamp duty surcharge that has applied to foreign investors in the residential property market since 21 June, 2016.

A foreign person, as defined by the Foreign Acquisitions and Takeovers Act 1975 (Cth), includes:

  1. an individual not ordinarily resident in Australia;
  2. a corporation or trustee of a trust in which an individual not ordinarily resident in Australia, a foreign corporation or a foreign government holds a substantial interest (20%); or
  3. a corporation or trustee of a trust in which two or more persons, each of whom is an individual not ordinarily resident in Australia, a foreign corporation or a foreign government, hold an aggregate substantial interest (40%).

The tax-free land tax threshold and the principal place of residence exemption will also not apply to foreign persons.

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