From 1 January 2025, the foreign purchaser duty surcharge will increase from eight per cent to nine per cent. From the 2025 land tax year, the foreign owner land tax surcharge will also increase, from four per cent to five per cent.
There are an estimated 20,000 foreign-owned residential properties in NSW, which is equivalent to around 0.6 per cent of the state’s stock of properties.
The increase is expected to encourage more properties to be made available to NSW residents and to ensure that overseas investors buying homes in NSW, are also contributing to the cost of building other homes and the necessary infrastructure to support them.
The foreign owner land tax surcharge was introduced in 2017 by the then Treasurer Gladys Berejiklian. It was increased to 2 per cent from 2018 and 4 per cent from 2023.
The foreign purchaser duty surcharge was introduced on 21 June 2016 at 4 per cent. It was increased to 8 per cent from 1 July 2017.
The Minns Labor Government is striking the right balance between the benefits of foreign investment in our communities and the need to ensure those investors are contributing back to housing and infrastructure across NSW.
The NSW Government is also announcing today that the land tax thresholds will be increased for the 2024 land tax year as planned, and then maintained at that level going forward. This applies to both the tax-free threshold and the premium rate threshold.
The adjustment brings NSW in line with most other Australian states. South Australia is the only other state to index land tax thresholds. The NSW tax-free threshold will remain around fifty per cent higher than the next nearest state.
This will take effect from the 2025 land tax year and be subject to periodic review.
These measures are expected to return additional revenue of approximately $1.68 billion over the next four years, funds which will be directed to addressing the housing crisis.
This is part of the Minns Labor Government’s plan to build better, stronger communities for NSW.
A plan to build a better NSW.
Treasurer Daniel Mookhey said:
“These are modest adjustments against the backdrop of a generational housing crisis.
“The government has been upfront with the people of NSW. We intend to pull every lever we can to confront the housing crisis and build the homes the people of NSW need.
“The Minns Labor Government is building a future to ensure our children and grandchildren can continue to call NSW home.”
