Foreign surcharge applies to land tax and purchaser duty on any residential land in New South Wales owned by foreign persons. A foreign person is defined in the Foreign Acquisitions and Takeovers Act 1975 of the Commonwealth, as modified by s 104J of the Duties Act 1997 (NSW).

The requirement to pay the foreign surcharge is subject to exceptions for the citizens of some countries. This arises due to New South Wales’ obligations under the foreign surcharge provisions within certain international tax treaties.

On 21 February 2023, Revenue NSW announced that citizens of New Zealand, Finland, Germany, and South Africa were no longer required to pay surcharge purchaser duty or surcharge land tax.

On 29 May 2023, Revenue NSW added India, Japan, Norway, and Switzerland as countries whose citizens are exempt from paying surcharge purchaser duty and surcharge land tax.

The exemption applies only to residential property in New South Wales, and only to natural persons. If a trust relationship exists, or a partnership or corporate entity is involved, the exemption may still apply but is not automatic.

There is a refund period for purchasers and landowners from the eight exempt nations who have already paid the surcharge purchaser duty or surcharge land tax. Transactions on or after 1 January 2021 are eligible for a refund, extending the previous refund period by six months from 1 July 2021.

The Purchase of Real Property (NSW), Sale of Real Property (NSW), and 1001 Conveyancing Answers (NSW) guides, which contain detailed commentary on surcharge purchaser duty and surcharge land tax regimes, have been updated accordingly.