ByLawyers News and Updates

Unoccupied land – NSW

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The period for which unoccupied land in New South Wales may be treated as a person’s principal place of residence for land tax purposes has been extended.

The Revenue Legislation Amendment Act 2023 (NSW) commenced on 1 July 2023. The Act permits the Chief Commissioner of Taxation to extend from four tax years to six tax years the maximum period during which unoccupied land may deemed a person’s principal place of residence.

The Chief Commissioner’s discretion is enlivened if they are satisfied that delays in completing building or other work has rendered the land uninhabitable. Any such delays must also have been due to circumstances outside the control of the property owner that they could not have reasonably avoided.

The Act is intended to ensure that owners who faced building and construction delays due to the exceptional circumstances during the COVID-19 pandemic, or the recent bushfires and floods, will not be penalised by being required to pay land tax on their still unoccupied land. Any four-tax year period that ended on or after 31 December 2019 may be extended to six years, at the Chief Commissioner’s discretion. Any property owner granted an extension will have up to six tax years in total to complete their building or renovation work, and to occupy the property as a principal place of residence, before land tax is charged.

The By Lawyers New South Wales conveyancing publications have been updated accordingly. The Purchase of Real Property (NSW), Sale of Real Property (NSW), and 1001 Conveyancing Answers (NSW) guides include extensive sections of commentary on land tax and land tax exemptions.

Surcharge purchaser duty – NSW

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From 21 February 2023 some foreign purchasers are no longer required to pay surcharge purchaser duty, or surcharge land tax, on residential property in New South Wales.

Citizens of New Zealand, Finland, Germany, and South Africa are exempt for purchases of residential related property or land. International tax treaties exist between Australia and each of  these countries that have the force of federal law and override inconsistent state-based revenue provisions.

Current purchasers and existing landowners from these countries may seek a refund of any surcharge purchaser duty and surcharge land tax paid in NSW on or after 1 July 2021. See the Revenue NSW website for the eligibility criteria for refunds, and a list of common questions and scenarios stemming from international tax treaties.

The exemptions relate only to natural persons. Where a trust relationship exists, or a non-individual entity such as a corporation or partnership is involved, and the entity or trustee is associated with these nations, the international tax treaties and the exemption may also be enlivened but is not automatic.

The relevant By Lawyers New South Wales conveyancing publications have been updated accordingly. The Purchase of Real Property (NSW), Sale of Real Property (NSW), and 1001 Conveyancing Answers (NSW) guides already contain extensive sections of commentary on surcharge purchaser duty and surcharge land tax regimes.

Shared equity scheme – NSW

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The NSW Government Shared Equity Home Buyer Helper scheme launched on 23 January 2023. It allows eligible applicants to purchase a home with as little as a 2% deposit.

The scheme applies to residential property only and is currently only available through one lender, Bendigo Bank. Other lenders will have the opportunity to join later in the year.

Under the scheme the government can contribute equity up to 30% of the price of an existing home, or up to 40% of a new build, lowering both the loan amounts and repayments of eligible applicants.

The Shared Equity Scheme is limited to 3,000 purchasers per financial year. Applications will be accepted during the 2022 – 2023 and 2023 – 2024 financial years. Eligible applicants for the scheme are:

  • single parents with dependent children
  • single people who are 50 years or older
  • first home buyers employed as key workers: nurses, midwives, paramedics, teachers, early childhood educators, and police officers.

Applicants must be Australian citizens or permanent residents over the age of 18 and have at least a 2% deposit. They cannot own any other land or property in Australia or overseas at the time of application.

Purchase prices for homes under the scheme are capped at $950,000 for Sydney and major regional areas, and at $600,000 for other areas.

Gross annual income tests of $90,000 for singles and $120,000 for couples apply, as well as asset tests.

Shared equity means the Government has a percentage share of the home, equivalent to what the applicant has contributed, secured by a registered second mortgage. There is no interest or rental payment required, but the expectation is that the government’s equity share is repaid over time or, when the property is sold.

The By Lawyers Conveyancing (NSW) guides have been updated to reflect the detailed eligibility criteria for the Shared Equity scheme and links to the Revenue NSW online assessment tool.

Letter to strata manager – NSW

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The By Lawyers conveyancing precedent Letter to strata manager requesting Section 184 certificate has been amended to include a settlement date and contact details for the purchaser’s representative.

It is the experience of practitioners that with electronic settlements, sending the section 22 notice to strata managers can often be overlooked. For this reason, the letter requesting the s 184 certificate now includes a settlement date, contact details for the purchaser’s representative and a reminder that if there is a problem after settlement the strata manager should contact the purchaser’s representative in the first instance.

This improvement was the result of user feedback. At By Lawyers, we pride ourselves on the cooperative and collegiate relationship we have with the firms using our commentary and precedents daily. We value the feedback that we receive as it helps us to continually improve our publications.

This enhanced precedent letter is available on the matter plan in the Conveyancing – Sale of real property Guide (NSW).

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