Foreign Buyers/Non-Residents

What makes you a foreign buyer / non-resident ?

From the Australian Taxation Office (ATO) definitions, if are not –

  • An Australian Citizen, living, residing or based in Australia for tax purposes
  • An Special New Zealand Citizen (visa subclass 444 visa), living, residing or based in Australia for tax purposes
  • A permanent resident in Australia, who also been living, residing and based on Australia for tax purposes, for at least 200 days.
  • You hold a partner (provisional) visa (subclass 820), who also been living, residing and based on Australia for tax purposes, for at least 200 days.
  • A Company, Trust, Partnership, Consortium or other business/organisation structure, that is predominately based in Australia, for tax purposes.

If you do not fall into any of these five-above categories, then you fall into the category of Foreign Buyer / Non-Resident, that requires written approval for acquisition in property from the Foreign Investment Review Board (FIRB) – https://firb.gov.au/

On this website, you will find the requirements, regulations, fee estimates and on-line application forms, that are required, mandatory, to acquire any property in Australia. Failure to do so, changes to the regulations in recent years, the Federal Treasurer with the Foreign Investment Review Board (FIRB), has the power to force you to sell, for breaching such regulations.

 

In additional to these the Foreign Investment Review Board (FIRB) regulatory requirements, you are subject to foreign non-residential additional stamp duty and land tax charges.

 

For New South Wales and Victorian properties acquired by foreign non-residential buyers –An additional 8% surcharge in Stamp Duty and 2% of the property price or value (whichever is higher) in land tax.

 

Other states have their own foreign surcharge provisions.

 

When it comes to selling, foreign non-residential sellers, individual, company, trust etc – They are subject to a 12.5% foreign non-residential exit tax. This is paid at settlement, under strict rules and monitoring from the ATO.

 

Be warmed, Australian citizens living abroad who sell property in Australia, are subject to the 12.5% foreign non-residential exit tax. Recent court case, couple who had their principle place of residence, in Forestville NSW, in Sydney’s northern beaches area. They moved to Switzerland to work and live, They sold their former principle place of residence in Forestville NSW, Sydney, remain living and working in Switzerland. The ATO caught up with them, forced them to pay the 12.5% foreign non-residential exit tax. The couple took the ATO to court, arguing they are “true blue Aussie Citizens born n bred”. They end up losing the court case to the ATO, with costs, as the ATO argued, with the court rules, under the tax system legislation, they are now foreign non-residents, living and working overseas – No longer Australian Citizens living, residing and based on Australia for tax purposes.

 

ABS Conveyancing are not immigration solicitors or agents, but can refer you to them, should you require immigration or citizenship assistance.

For a quote and enquiries, email us on paul@absgroup.net.au