New South Wales Consolidated Acts

LAND TAX ACT 1956 - SECT 5A

5A Levy of surcharge land tax on residential land owned by foreign persons--2017 and subsequent land tax years

(1) Land tax is payable under this section in respect of residential land owned by a foreign person (
"surcharge land tax" ).

(2) In respect of the taxable value of all the residential land owned by the foreign person at midnight on 31 December in any year (commencing with 2016), surcharge land tax is to be charged, levied, collected and paid under the provisions of the Principal Act and in the manner prescribed under that Act for the period of 12 months commencing on 1 January in the next succeeding year at the rate of--

(a) in the case of all residential land owned by the foreign person at midnight on 31 December 2016--0.75% of that taxable value as assessed under the Principal Act, and

(b) in the case of all residential land owned by the foreign person at midnight on 31 December in the years 2017-2021--2% of that taxable value as assessed under the Principal Act, and

(c) in the case of all residential land owned by the foreign person at midnight on 31 December in any other year, commencing with 2022--4% of that taxable value as assessed under the Principal Act.

(3) Surcharge land tax is payable in addition to any land tax payable in respect of the residential land under the other provisions of this Act, and is so payable even if no land tax is payable under those other provisions.

(4) The Principal Act applies to surcharge land tax in respect of residential land owned by a foreign person subject to the following--

(a) surcharge land tax is payable as if the residential land were the only land owned by the foreign person,

(b) if the residential land is also owned by a person who is not a foreign person, the taxable value of the land is to be reduced to the proportionate value of the interest in the land of the foreign person,

(c) if the foreign person is a joint owner of the residential land, the person is to be individually (and not jointly) assessed and is liable in respect of the value of the person's proportionate interest in the land as if the person were the owner of a part of the land in proportion to the person's interest (and accordingly section 27 (2)-(4) of the Principal Act does not apply),

(d) if the Chief Commissioner is satisfied that the residential land is used for purposes other than residential purposes, the taxable value of the land is to be reduced by the apportionment factor determined in accordance with section 104ZB of the Duties Act 1997 in relation to the land,

(e) if the foreign person is the trustee of a fixed trust (within the meaning of section 3A of the Principal Act) in relation to the residential land, the person is not liable to surcharge land tax,

(f) the provisions of the Principal Act relating to the persons who are taken to be owners of the residential land apply to surcharge land tax, except that section 23 of the Principal Act does not operate to make a mortgagee in possession an owner of the land unless the mortgagor is a foreign person,

(g) the person is exempt from liability to pay surcharge land tax in respect of the land for a land tax year because the land is the principal place of residence of the foreign person (and accordingly sections 9C and 9D of the Principal Act operate to reduce the land value of the land if it is the principal place of residence of the person) only if the person is eligible for the exemption under section 5B,

(h) the tax thresholds under Division 4A of Part 7 of the Principal Act do not apply to surcharge land tax,

(i) any other modification prescribed by the regulations under the Principal Act applies to surcharge land tax.

(5) If a foreign person defaults in the payment of surcharge land tax then, without releasing the foreign person from his or her liability, the following provisions apply as long as the default continues--

(a) if the foreign person is a joint owner of the land concerned--any other joint owner (whether or not a foreign person) is, on being served with a notice by the Chief Commissioner requiring payment of the unpaid surcharge land tax, responsible for its payment and the unpaid tax may be recovered from that other joint owner as if he or she were the defaulting taxpayer,

(b) if the foreign person is a beneficiary of a trust relating to the land concerned--the trustee (whether or not a foreign person) is, on being served with a notice by the Chief Commissioner requiring payment of the unpaid surcharge land tax, responsible for its payment and the unpaid tax may be recovered from that trustee as if he or she were the defaulting taxpayer,

(c) all payments made under this subsection by that other joint owner or that trustee are taken to be made on behalf of the defaulting taxpayer,

(d) that other joint owner or that trustee may recover from the foreign person any amount paid by that other joint owner or that trustee under this subsection.