Potential relief from foreign investor surcharges in NSW

As mentioned in an earlier article, foreign persons who own residential land in NSW are subject to a Land Tax Surcharge of 0.75% (stepping up to 2% in 2018) on the taxable value of the residential land so owned, in addition to any land tax otherwise payable.

Similarly, foreign persons are required to pay a Surcharge Purchaser Duty of 8%, in addition to the duty otherwise payable on the purchase of residential property in NSW.

Both of these Surcharges are applied in proportion to the ownership by foreign person(s) of the underlying residential land. In circumstances where a foreign person is a potential beneficiary under a discretionary trust, that person's percentage ownership will be deemed to be the maximum percentage of the income or property that the trustee could possibly distribute to them.