Glossary
Foreign purchaser surcharge
Also called: foreign buyer duty, surcharge purchaser duty
A foreign purchaser surcharge is additional duty that some states and territories charge foreign persons buying residential land, on top of standard transfer duty. Who counts as a foreign person and the rates vary between jurisdictions.
An example
A buyer who is not an Australian citizen or permanent resident purchases an apartment. In addition to standard duty, the state charges a surcharge because the buyer is a foreign person under its law.
Why it matters
Surcharges can significantly increase purchase costs and may also apply to companies and trusts with foreign interests. Privet's calculators do not apply surcharges, so the official revenue office should be consulted.
Points to check
Check the definition of a foreign person in the state where the property is located, because it can include companies and trusts with foreign shareholders or beneficiaries. Each state sets its own rules, exemptions and rates. A foreign purchaser may also need approval from the Foreign Investment Review Board before buying. Get advice before signing a contract, because the surcharge can significantly increase the funds needed at settlement.