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This is a Bill, not an Act. For current law, see the Acts databases.
South Australia
Stamp Duties (Foreign Ownership Surcharge) Amendment
Bill 2017
A BILL FOR
An Act to amend the
Stamp
Duties Act 1923
.
Contents
Part 2—Amendment of Stamp Duties
Act 1923
3Amendment of section
2—Interpretation
4Insertion of Part 3 Division 9
Division 9—Foreign ownership
surcharge
72Surcharge for
foreign purchasers of residential land
102ABSurcharge
where foreign person or group acquires interest in residential
land
The Parliament of South Australia enacts as
follows:
This Act may be cited as the Stamp Duties (Foreign Ownership Surcharge)
Amendment Act 2017.
In this Act, a provision under a heading referring to the amendment of a
specified Act amends the Act so specified.
Part 2—Amendment
of Stamp Duties
Act 1923
3—Amendment
of section 2—Interpretation
(1) Section 2(1)—after the definition of financial
product insert:
foreign person—see subsection (14);
foreign trust—see subsection (14);
(2) Section 2(1)—after the definition of unit trust
scheme insert:
wholly foreign owned corporation—see subsection
(14);
wholly foreign owned trust—see subsection
(14);
(3) Section 2—after subsection (13) insert:
(a) a person is a foreign person if—
(i) in the case of a natural person—the person is
not—
(A) an Australian citizen within the meaning of the Australian
Citizenship Act 2007 of the Commonwealth; or
(B) the holder of a permanent visa within the meaning of section 30(1) of
the Migration Act 1958 of the Commonwealth; or
(C) a New Zealand citizen who is the holder of a special category visa
within the meaning of section 32(1) of the Migration Act 1958 of the
Commonwealth; or
(ii) in the case of a corporation—
(A) the corporation is incorporated in a jurisdiction that is not an
Australian jurisdiction; or
(B) a person who is a foreign person (by virtue of this paragraph) or a
trustee for a foreign trust, or a number of such persons in
combination—
• holds or hold 50% or more of the corporation's shares;
or
• is or are entitled to cast, or control the casting of, 50% or more
of the maximum number of votes at a general meeting of the corporation;
and
(b) a trust is a foreign trust if—
(i) in the case of a trust where the beneficial interests are
fixed—a beneficial interest of 50% or more of the capital of the trust
property is held by 1 or more foreign persons; or
(ii) in the case of a discretionary trust—1 or more of the following
is a foreign person:
(A) a trustee;
(B) a person who has the power to appoint under the trust;
(C) an identified object under the trust;
(D) a person who takes capital of the trust property in default;
and
(c) a corporation is a wholly foreign owned corporation if a
foreign person or the trustee for a foreign trust, or a number of such persons
in combination—
(i) holds or hold 100% of the corporation's shares; or
(ii) is or are entitled to cast, or control the casting of, 100% of the
maximum number of votes at a general meeting of the corporation; and
(d) a trust is a wholly foreign owned trust if it is not a
discretionary trust and a beneficial interest of 100% of the capital of the
trust property is held by 1 or more foreign persons.
(15) In
subsection (14)
—
hold—a person holds property (including a security of a
corporation) if the person—
(a) is registered as the holder; or
(b) is beneficially entitled to the property; or
(c) controls the exercise of rights attached to the property.
4—Insertion
of Part 3 Division 9
Part 3—after Division 8 insert:
Division 9—Foreign ownership
surcharge
72—Surcharge for foreign purchasers of residential
land
(1) This section applies to a dutiable instrument (including a statement
under section 71E) executed, or taken to have been executed, on or after 1
January 2018.
(2) If an instrument to which this section applies effects, acknowledges,
evidences or records a transaction whereby an interest in residential land is
acquired by a foreign person or a person who takes the interest as trustee for a
foreign trust, the person is liable to pay a surcharge (a foreign
ownership surcharge) to the Commissioner in addition to the duty payable
on the instrument.
(3) The amount of the foreign ownership surcharge is 7% of the value of
the interest acquired by the person in the residential land by virtue of the
transaction effected, acknowledged, evidenced or recorded by the dutiable
instrument.
(4) The foreign ownership surcharge is to be taken for the purposes of
this Act to be duty payable on the instrument.
(5) If—
(a) a foreign ownership surcharge was paid by a person under this section
because the person was a foreign person when an interest in residential land was
acquired by the person; and
(b) the person ceases to be a foreign person not more than 12 months
after the acquisition of the interest; and
(c) the person retains the interest at the time that the person ceases to
be a foreign person,
the Commissioner must, on application by the person, refund the amount of
the foreign ownership surcharge to the person.
(6) If—
(a) a foreign ownership surcharge was paid by a person under this section
because the person was a trustee for a foreign trust when an interest in
residential land was acquired by the person (taking as trustee for the trust);
and
(b) the trust for which the person is trustee ceases to be a foreign trust
not more than 12 months after the acquisition of the interest; and
(c) the person retains the interest on behalf of the trust at the time
that the trust ceases to be a foreign trust,
the Commissioner must, on application by the person, refund the amount of
the foreign ownership surcharge to the person.
(7) If, not more than 3 years after the acquisition of an interest in
residential land effected, acknowledged, evidenced or recorded by an instrument
to which this section applies, the person who acquired the interest becomes a
foreign person, or, where the interest was acquired by the person taking as
trustee, the trust for which the person is trustee becomes a foreign trust, the
following provisions apply:
(a) subject to
paragraph (b)
—
(i) the person must, within 28 days of becoming a foreign person or the
trust becoming a foreign trust, notify the Commissioner in writing of that fact;
and
(ii) a foreign ownership surcharge is payable on the instrument;
and
(iii) for the purposes of section 20, the surcharge is to be regarded as
having become payable when the person became a foreign person or the trust
becomes a foreign trust; and
(iv) the person may, at the discretion of the Commissioner, be liable to
pay interest and penalty tax as if the failure to pay the surcharge at the date
of the acquisition were a tax default under the
Taxation
Administration Act 1996
;
(b)
paragraph (a)
does not apply if—
(i) the interest in the residential land was conveyed or transferred by
the person or trust before the person or trust became a foreign person or a
foreign trust; or
(ii) a foreign
ownership surcharge has been paid, or is liable to be paid, in respect of the
transaction by virtue of which the person or trust became a foreign person or a
foreign trust;
(c) however, if the person or trust referred to in
paragraph (b)(ii)
is a corporation or trust that is not a wholly foreign owned corporation
or trust—
(i) the person is liable to pay a foreign ownership surcharge on the
instrument; but
(ii) the amount of the foreign ownership surcharge is to be reduced by the
amount of the foreign ownership surcharge (if any) paid in respect of the
transaction by virtue of which the person or trust became a foreign person or a
foreign trust.
(8) Land will be
taken to be residential land for the purposes of this section
if—
(a) the Commissioner, after taking into account information provided by
the Valuer-General, determines that it is being predominantly used for
residential purposes; or
(b) the Commissioner, after taking into account information provided by
the Valuer-General, determines that although the land is not being used for any
particular purpose at the relevant time the land should be taken to be used for
residential purposes due to improvements that are residential in character
having been made to the land; or
(c) the Commissioner, after taking into account information provided by
the Valuer-General, determines that the land is vacant, or vacant with only
minor improvements, that the land is within a zone established under the
planning and development law of this State that envisages the use, or potential
use, of the land as residential, and that the land should be taken to be used
for residential purposes due to that zoning (subject to the qualification that
if the zoning of the land indicates that the land could, in a manner consistent
with the planning and development law, be used for some other purpose (other
than for primary production) then the vacant land will not be taken to be used
for residential purposes).
(9) For the purposes of
subsection (8)
, the date that is relevant to a determination as to whether land is
residential land is the date of the relevant instrument.
(10) In this section—
residential land—see
subsection (8)
.
After section 102A insert:
102AB—Surcharge where foreign person or group
acquires interest in residential land
(1) This section applies to a transaction that is dutiable under this Part
if the transaction was entered into on or after 1 January 2018.
(2) If a foreign
entity notionally acquires an interest in residential land as a result of a
transaction to which this section applies, the entity is liable to pay a
surcharge (a foreign ownership surcharge) to the Commissioner in
addition to the duty payable on the transaction under this Part.
(3) If a foreign
entity is a member of a group that notionally acquires an interest in
residential land as a result of a transaction to which this section applies, the
entity is liable to pay a surcharge (a foreign ownership
surcharge) to the Commissioner in addition to the duty payable on the
transaction by the group.
(4) The amount of the foreign ownership surcharge under
subsection (2)
is 7% of the value of the interest notionally acquired by the foreign
entity in the residential land (as determined under section 99).
(5) The amount of the foreign ownership surcharge under
subsection (3)
is 7% of the value of the foreign entity's interest in the interest
notionally acquired by the group in the residential land (as determined under
section 99).
(6) The foreign ownership surcharge is to be taken for the purposes of
this Act to be duty payable on the transaction.
(7) If—
(a) not more than 12 months after a notional acquisition of an interest in
residential land as a result of a transaction to which this section applies, an
entity that has paid a foreign ownership surcharge under this section on the
transaction ceases to be a foreign entity; and
(b) at the time the entity ceases to be a foreign entity—
(i) the entity retains the interest notionally acquired; or
(ii) in the case of an entity that paid the surcharge by virtue of being a
member of a group that notionally acquired the interest—the group retains
the interest notionally acquired, and the entity retains its interest in the
interest notionally acquired by the group,
the Commissioner must, on application by the entity, refund the amount of
the foreign ownership surcharge to the entity.
(8) If, not more than 3 years after the notional acquisition of an
interest in residential land as a result of a transaction to which this section
applies, the entity that notionally acquired the interest becomes a foreign
entity, or, if the interest was notionally acquired by a group, an entity that
is a member of the group (and was a member of the group at the time of the
acquisition) becomes a foreign entity, the following provisions apply:
(a) subject to
paragraph (b)
—
(i) the entity must, within 28 days of becoming a foreign entity, notify
the Commissioner in writing of that fact; and
(ii) a foreign ownership surcharge is payable on the transaction;
and
(iii) for the purposes of section 102B, the surcharge is to be regarded as
having become payable when the entity became a foreign entity; and
(iv) the entity may, at the discretion of the Commissioner, be liable to
pay interest and penalty tax as if the failure to pay the surcharge at the date
of the transaction were a tax default under the
Taxation
Administration Act 1996
;
(b)
paragraph (a)
does not apply if—
(i) the entity ceased to have a notional interest in the residential land
before the entity became a foreign entity; or
(ii) in the case of an entity that is (but for this subparagraph) liable
to pay the surcharge by virtue of being a member of a group that notionally
acquired the interest—the group ceased to have a notional interest in the
residential land, or the entity ceased to have an interest in the interest
notionally acquired by the group, before the entity became a foreign entity;
or
(iii) a foreign
ownership surcharge has been paid, or is liable to be paid, in respect of the
transaction by virtue of which the entity became a foreign entity;
(c) however, if an entity referred to in
paragraph (b)(iii)
is a corporation or trust that is not a wholly foreign owned corporation
or trust, then—
(i) the entity is liable to pay a foreign ownership surcharge on the
transaction; but
(ii) the amount of the foreign ownership surcharge is to be reduced by the
amount of the foreign ownership surcharge (if any) paid in respect of the
transaction by virtue of which the entity became a foreign entity.
(9) Land will be
taken to be residential land for the purposes of this section
if—
(a) the Commissioner, after taking into account information provided by
the Valuer-General, determines that it is being predominantly used for
residential purposes; or
(b) the Commissioner, after taking into account information provided by
the Valuer-General, determines that although the land is not being used for any
particular purpose at the relevant time the land should be taken to be used for
residential purposes due to improvements that are residential in character
having been made to the land; or
(c) the Commissioner, after taking into account information provided by
the Valuer-General, determines that the land is vacant, or vacant with only
minor improvements, that the land is within a zone established under the
planning and development law of this State that envisages the use, or potential
use, of the land as residential, and that the land should be taken to be used
for residential purposes due to that zoning (subject to the qualification that
if the zoning of the land indicates that the land could, in a manner consistent
with the planning and development law, be used for some other purpose (other
than for primary production) then the vacant land will not be taken to be used
for residential purposes).
(10) For the purposes of
subsection (9)
, the date that is relevant to a determination as to whether land is used
for residential purposes is the date of the relevant transaction.
(11) In this section—
foreign entity means a foreign person or a foreign
trust;
residential land—see
subsection (9)
.