Foreign purchasers that acquire residential property in South Australia will be required to pay a surcharge of 4% of the dutiable value of the property. This surcharge amount is in addition to the duty that is otherwise payable.
The surcharge will apply where a property, part of a property or a part interest in a property is acquired. It will also apply to acquisitions that are captured by the land holder duty provisions.
If the property acquired by a foreign purchaser is exempt from duty, the acquisition will also be exempt from the surcharge.
The surcharge will apply to dutiable instruments (including a statement under Section 71E of the Stamp Duties Act 1923) entered into on or after 1 January 2018.
The Stamp Duties Act 1923 will be amended to provide for the surcharge.
Change of status
A refund of the surcharge will be available where a person who is a foreign purchaser for the purposes of the surcharge at the time of entering into a dutiable instrument, but then ceases to be a foreign person as defined, not more than 12 months after the interest in the residential property was acquired.
The surcharge will be retrospectively imposed where a person, corporation or trust becomes a foreign purchaser within three years of the acquisition of the residential property.
A number of changes announced in the 2017-18 State Budget have implications for foreign purchasers of South Australian property.
Under the amendments proposed in the Budget Measures Bill 2017 a foreign purchaser will include natural persons, corporations and trusts.
Foreign natural person
A foreign natural person is any individual who is not an Australian citizen, Australian permanent resident or New Zealand citizen who holds a special category visa.
A corporation will be foreign where it is incorporated outside Australia or where at least 50% of its shareholding is held by foreign persons, companies or trusts.
A trust will be foreign where the trustee, a person who has the power to appoint under the trust, an identified object under the trust or a person who takes capital of the trust property in default is foreign.