Surcharge purchaser duty for foreign buyers in NSW
What a foreign person adds to the ordinary transfer duty when acquiring residential land in New South Wales, and how a mixed couple is charged.
Checked by Radif Partners · Editorial policy · Methodology
Surcharge purchaser duty adds 9 % of the dutiable value to every NSW residential purchase made by a foreign person, charged on the share that person acquires and paid as well as ordinary transfer duty, not instead of it. On a $1,000,000 house bought outright by a foreign investor the bill is $129,187: $39,187 of transfer duty and $90,000 of surcharge. Revenue NSW applies the surcharge to the foreign buyer's interest only, so where an Australian citizen and a foreign partner buy as equal joint tenants, the 9 % falls on half the value. The First Home Buyers Assistance Scheme can remove the transfer duty for an eligible couple, but it never removes the surcharge. A New Zealand citizen or a permanent resident who is not ordinarily resident in Australia can be charged surcharge duty even while qualifying for the first home scheme, a trap that catches buyers returning from abroad.
Foreign buyer: duty plus surcharge
Total for a foreign buyer
$115,687
| Duty at the general scale | $34,687 |
| Surcharge (surcharge purchaser duty) | $81,000 |
| Share of the price | 12.9 % |
Two duties on one contract
The surcharge is easy to underestimate because it looks like a small rate next to the transfer duty scale. It is not small. Transfer duty in NSW works out at roughly 3.9 % of the price on a $1,000,000 home; the surcharge is a flat 9 % of the dutiable value from the first dollar, with no threshold and no taper. For a foreign buyer it is usually the larger of the two amounts.
| Price | Transfer duty | Surcharge purchaser duty | Total | Share of the price |
|---|---|---|---|---|
| $500,000 | $16,687 | $45,000 | $61,687 | 12.3 % |
| $750,000 | $27,937 | $67,500 | $95,437 | 12.7 % |
| $1,000,000 | $39,187 | $90,000 | $129,187 | 12.9 % |
| $1,500,000 | $63,787 | $135,000 | $198,787 | 13.3 % |
| $2,500,000 | $118,787 | $225,000 | $343,787 | 13.8 % |
| $4,000,000 | $203,237 | $360,000 | $563,237 | 14.1 % |
The last column is the useful one. A foreign buyer of a $500,000 unit hands over about 12 % of the price in duty; above the premium threshold the combined figure passes 14 %.
The base is the dutiable value
Revenue NSW calculates the surcharge on the same dutiable value as transfer duty, which is the higher of the price and the market value. A discounted sale between relatives does not shrink the surcharge any more than it shrinks the transfer duty; the office can ask for a valuation and charge both on it. The dutiable value guide explains when a valuation is requested.
Joint purchases: the share decides
The Revenue NSW surcharge page applies the 9 % to the dutiable value of the interest the foreign person acquires. Transfer duty, by contrast, is assessed on the whole property. A mixed couple therefore pays full transfer duty on the property and a surcharge on part of it.
| Price | Transfer duty (whole property) | Surcharge, foreign half | Surcharge, foreign quarter |
|---|---|---|---|
| $600,000 | $21,187 | $27,000 | $13,500 |
| $900,000 | $34,687 | $40,500 | $20,250 |
| $1,200,000 | $48,187 | $54,000 | $27,000 |
The share is the interest the foreign buyer actually takes. Equal joint tenants each hold half, which is why the half column is the one most couples need; a parent helping an adult child from overseas with a quarter stake sits in the right-hand column.
The first home scheme and the surcharge
Couples are often told that the FHBAS makes their first purchase duty free. For a citizen and a temporary visa holder, that is only half true. The first home scheme needs at least one buyer to be an Australian citizen or permanent resident, so the couple can qualify and see transfer duty disappear below $800,000. The surcharge on the foreign partner's share is a different tax and stays.
| First home price | Transfer duty if eligible for the FHBAS | Surcharge on the foreign half | Total payable |
|---|---|---|---|
| $650,000 | $0 | $29,250 | $29,250 |
| $800,000 | $0 | $36,000 | $36,000 |
| $900,000 | $19,594 | $40,500 | $60,094 |
At $800,000 the transfer duty is nil, yet the couple still owes $36,000. Budgeting for a free first home and finding that figure on the settlement statement is the most expensive misunderstanding on this page.
Citizens and residents who live abroad
Revenue NSW flags a second situation. A New Zealand citizen, or an Australian permanent resident, who is not ordinarily resident in Australia can be liable for surcharge purchaser duty while still meeting the FHBAS tests, which focus on citizenship and residency status. Someone buying from overseas before relocating should therefore check the surcharge rules as carefully as the concession rules.
Three buyers, one $900,000 terrace
Put three different households in front of the same terrace and the gap becomes concrete. A Sydney couple who have owned before pay ordinary transfer duty of $34,687. A temporary resident buying alone pays that same transfer duty and $81,000 of surcharge, $115,687 in total. A first home couple made up of a citizen and a partner on a work visa, buying in equal shares, pays $19,594 of reduced transfer duty under the FHBAS and $40,500 of surcharge on the partner's half. The middle case pays more than twice what the first one does for an identical property, and the difference is entirely the surcharge.
What the surcharge does not change
The off-the-plan payment deferral is closed to anyone who is not a citizen or permanent resident (or one of the listed visa holders), as set out on the NSW off-the-plan page. The transfer duty scale itself is identical for local and foreign buyers; only the surcharge separates them.
Comparing NSW with other states
Six of the eight jurisdictions charge a foreign purchaser surcharge; the official ACT and Northern Territory calculators add none. At 9 %, NSW has the highest rate of the six. On $1,000,000 the total for a foreign buyer is $129,187 in NSW, $135,000 in Victoria and $118,025 in Queensland. The national foreign buyer guide lines up all eight.