Customer contact centre

Due to higher than usual demand this week, our Contact Centre will be operating for fines enquiries only this Saturday, 26 May from 9.30am to 4.00pm. For fines enquiries phone: 1300 138 118. For overdue fines phone: 1300 655 805. For any other enquiries please call during normal business hours (Monday to Friday).

Calculating surcharge

To assess the surcharge, we calculate the taxable value of residential land, taking into account any relevant exemptions, the use of the land, and the proportion of ownership of each foreign person.

The taxable value of residential land used for land tax purposes is also used to calculate the surcharge. The tax liability is generally the average of the unimproved land value for the current tax year and for the previous two tax years.

Where a parcel of land was only recently created (for example, by subdivision or amalgamation) the average value will be based only on the values for those taxing dates when the newly created land item existed.

Example 1 - individual ownership, land value over the tax threshold

Lucas is a foreign person who owns residential land with a total land value of $700,000.

The land tax payable is (taxable land value – land tax threshold) x 1.6% + $100:

($700,000 - $629,000) x 1.6% + $100 = $1,236

The surcharge payable for the 2018 land tax year at 2.0% of $700,000 = $14,000.

Example 2 - individual ownership, land value under the tax threshold

Lisa is a foreign person and owns residential land with a total land value of $400,000.

The land tax payable is nil as the land is under the threshold of $629,000.

The surcharge payable for the 2018 land tax year at 2.0% of $400,000 = $8,000.

Example 3 - commercial and residential land ownership

Mary is a foreign person who owns land with a total land value of $2,000,000. Mary owns both commercial and residential land.

$1,200,000 of the land held by Mary is 'residential land'. The remaining $800,000 is commercial land.

The land tax payable is (taxable land value − land tax threshold) x 1.6% + $100:

($2,000,000 - $629,000) x 1.6% + $100 = $22,036

The surcharge payable for the 2018 land tax year is calculated on the residential land (2.0% of $1.2 million) = $24,000.

Example 4 - land owned in partnership

Amy (an Australian citizen) and Nick (a foreign person) each own a 50% interest in a block of residential land with a taxable land value of $1 million.

The land tax payable by Amy and Nick is:

(taxable land value − land tax threshold) x 1.6% + $100

($1,000,000 - $629,000) x 1.6% + $100 = $6,036

As an Australian citizen, Amy is not liable for surcharge.

The surcharge land tax payable by Nick for 2018 is:

Taxable land value of the interest owned by Nick x 2.0% is:

$500,000 x 2.0% = $10,000

Example 5 - partnership and individual ownership

Jill (an Australian citizen) and Sam (a foreign person) own residential land with a taxable land value of $400,000. They each own a 50% interest in the land.

The land tax payable by Jill and Sam is calculated on the $400,000. The land tax payable for the partnership is nil as the land is under the threshold of $629,000.

Sam also solely owns land with a taxable land value of $300,000. The land tax payable by Sam is nil as the land is under the threshold of $629,000.

Sam is subject to surcharge on both properties as a foreign person.

As an Australian citizen, Jill is not liable for surcharge.

The surcharge payable for Sam for the 2018 land tax year at 2.0% of $500,000 = $10,000.

Example 6 - tracing an interest held through interests in other corporations or trusts

If a foreign person or persons holds a substantial interest or aggregate substantial interest in a corporation or trust, the foreign person or persons are taken to hold any interest that company or trust holds. The tracing process can be applied multiple times through a number of entities.

Contact

Phone
1300 139 816*
8.30am - 5.00pm Monday to Friday
Mail
GPO Box 4269
SYDNEY NSW 2001
Email

Last updated: 15 May 2018