THE LAND TAX STING IN THE TAIL WHICH NO-ONE KNOWS ABOUT!
All publicity about this year’s NSW State budget has been centred around the additional 4% stamp duty which will now be charged to buyers who are not Australian citizens or Permanent Residents! Fair enough for overseas purchasers contemplating buying property if NSW. They can decide whether to buy – or not – based on this additional impost.
Not so for those who currently own property in NSW!
What has been less publicised is the new “surcharge” Land Tax which, from next year will apply to all non-Australian residents who already own property in NSW. Often this is a couple where one is Australian and the other is not.
The new annual “surcharge” Land Tax (0.75% of the Land Value) also has different “rules” in that the principal place of residence is not exempt. Nor does the threshold value (this year $482,000.00) apply. Surcharge Land Tax will apply to every dollar value of the land.
A “typical” modest house in Sydney, owned by a couple where one is not Australian citizen or permanent resident, will be hit by an annual charge of at least $3,000.00 – and likely the first time this couple will learn about the new charge will be when the accounts start arriving early next year!
Often such a couple has not bothered about the non-Australian applying for either citizenship or permanent residency. There has been no urgent need to do so – there now is!!
My advice to any of these couples is for the non-Australian to now apply for either citizenship or permanent residency – so they may not be penalised by the NSW government for simply owning their own home!