The foreign ownership surcharge applies to an acquisition of residential land which is otherwise liable to duty. This includes:
If the transfer to the foreign person is exempt from duty then the foreign ownership surcharge does not apply.
No. The foreign ownership surcharge applies to the value of the interest acquired by the foreign person.
There is a summary list of all visas available, though it does not show which visas are permanent and which visas are temporary.
For specific information, go to https://www.homeaffairs.gov.au/trav/visa-1/visa-listing and search for the visa on the webpage. Then read the visa description to see if this is a permanent visa or a temporary visa.
The foreign person can apply to RevenueSA for a refund of the foreign ownership surcharge if the person ceases to be a foreign person not more than 12 months after the acquisition of the interest. See Section 72(5) of the Stamp Duties Act 1923.
A refund form is available from the Stamp Duty forms page on the RevenueSA website.
If within 3 years of the acquisition of the interest in residential land the acquirer becomes a foreign person (being either a natural person or company) or foreign trust, the Commissioner must be notified in writing within 28 days of becoming foreign.
The onus is on the acquirer to notify the Commissioner in writing within 28 days of becoming foreign.
The period starts from the date of acquisition of the property i.e. the settlement date.
Yes, the foreign ownership surcharge applies on the interest of 1% acquired by the foreign person.
Foreign ownership surcharge is taken to be duty payable on an instrument. If GST is payable on the land, then duty and the foreign ownership surcharge are payable on the GST inclusive amount.
Yes. This is considered to be within the definition of residential land.
If a purchase price has been paid, an interest in residential land has been acquired by the foreign person, such that duty and the foreign ownership surcharge are payable. If no Transfer has been executed to stamp, then Section 71E of the Act applies (‘transfers otherwise than by dutiable instrument). A Section 71E Statement, including the duty for the foreign ownership surcharge, must be lodged and stamped. This can be stamped on RevenueSA Online.
A Licence to Occupy or a Caveat in this scenario will not negate the requirement for a Section 71E statement.
Where the licence relates to residential land, the Foreign Ownership Surcharge will apply.
The foreign ownership surcharge applies to a dutiable instrument executed on or after 1 January 2018. Whether a transfer is executed (and stamped) prior to settlement does not affect the foreign ownership surcharge liability.
The foreign ownership surcharge applies. The Commissioner of State Taxation has no discretion to waive the foreign ownership surcharge.
Yes. The foreign ownership surcharge can either be determined on RevenueSA Online or the instrument submitted for opinion assessment if required.
A discretionary trust will only be a foreign trust for the purposes of the foreign ownership surcharge where one or more of the following is a foreign person:
Providing none of the above are foreign persons, a discretionary trust will not be a foreign trust and the trust deed would not need to be amended.
In addition, with regards to an identified object under the trust, the object must be identified in the trust deed by name in order for a trust to be a foreign trust. The term ‘identified as an object’ is not a blanket reference to a class or range of beneficiaries under a discretionary trust deed who are not identified by name. Also, changing the trustee, a person who has the power to appoint under the trust or a person who takes capital of the trust property in default would not cause a dutiable resettlement of the trust.
Section 71(5)(g) provides an exemption from duty for discretionary trusts created wholly or principally for the benefit of a family group where a natural person object renounces or surrenders their interest in a discretionary trust and another member of the family group is to continue as an object.
If the identified or named beneficiary is a foreign person then the trust is considered a foreign trust and the foreign ownership surcharge will apply. If an unnamed person who is a foreign person is within a class of family members, this is not considered when determining if the foreign ownership surcharge applies.
RevenueSA’s Foreign Ownership Surcharge page provides a detailed example (search for “Local2Global Pty Ltd”) which addresses what foreign ownership surcharge is payable in the above example.
In summary, by virtue of Foreign Company B acquiring a 50% interest in Company A (a land holding entity), Company A becomes a foreign person (person includes companies) within 3 years of the acquisition of the residential land in February 2018.
As such, both landholder duty and the foreign ownership surcharge are payable on the 50% landholder acquisition (by Company B). Whilst foreign ownership surcharge is also payable on the full value of the February 2018 land acquisition (by Company A), the amount payable is reduced (with the reduction in essence being a rebate) by the foreign ownership surcharge paid in respect of the landholder acquisition.
RevenueSA’s Compliance Services branch obtains information from various sources, including the ATO, ASIC, FIRB, the Department of Home Affairs, the Department of Immigration and Border Protection. Such information can be used to identify potential tax defaults.
The onus is on the foreign person (which includes a company) to notify the Commissioner of State Taxation in writing of becoming a foreign person or foreign trust within 28 days of becoming foreign.
You will need to request the relevant information about the purchaser (not the Attorney).
It is a requirement that the person is a holder of a permanent visa within the meaning of Section 30(1) of the Migration Act 1958 (Cwlth). This can be ascertained by the particular visa number.
The Department of Home Affairs may be able to assist with enquiries on visa status.