Coffs Harbour, New South Wales, Australia

Changes to NSW Property Tax

By Tony Nunes and Lishi Huang, Kelly + Partners Chartered Accountants

The New South Wales (NSW) Government is considering a once in a generation change to the way it levies stamp duty and land tax on new property purchases. If implemented, buyers will be able to choose to pay either stamp duty and land tax or a new, lower, property tax.

The Status Quo

Stamp duty is a one-off, upfront tax on the purchase of property payable by the buyer. The rate varies depending on the value of the property but is on average about 5.5% of the purchase price of the property. Foreign investors are also subject to an additional surcharge of 8%.

Land tax is an annual tax on the ownership of property payable by the owner. The rate varies depending on the value of the property but is typically 1.6%–2% of the value of the property. Foreign investors are also subject to an additional surcharge of 2% on residential properties.

Proposed Changes

Buyers will be able to choose to pay an annual property tax instead of stamp duty and land tax. The property tax rate will be significantly lower than the stamp duty and land tax rates. The proposal is to have different rates for different property types:

  • residential owner-occupied
    – AUD 500 + 0.3%;
  • residential investment
    – AUD 1,500 + 1%;
  • farmland – 0.3%;
  • commercial – 2.6%.

The rate will also be applied to the “unimproved land value”, which is lower than the market value of the property. Once a property has been opted into the property tax regime, all future buyers of the property will be subject to the same regime. Over time, it is anticipated that more and more properties will become subject to the property tax regime.

What this means for foreign investors?

As foreign investors are not exempt from stamp duty nor land tax, the new property tax regime will significantly reduce the cost of buying property in Australia. It is yet to be confirmed whether the new regime will be available to foreign investors, or whether a surcharge rate will apply.

What’s Next?

We wait! The Government is still consulting, so any changes are likely to be some time away.


Tony Nunes

Tony Nunes

GGI member firm
Kelly + Partners Chartered Accountants
Advisory, Auditing & Accounting, Corporate Finance, Tax, Fiduciary & Estate Planning
Sydney, Australia
T: +61 2 9933 8866
E: This email address is being protected from spambots. You need JavaScript enabled to view it.
W: kellypartners.com.au

Kelly + Partners Chartered Accountants is a specialist chartered accounting business that assists private businesses, private clients, and families to manage their business and personal financial affairs. The Kelly + Partners Tax Consulting practice is respected as one of the foremost tax advisory firms in Australia and offers the full range of direct, indirect, and international tax services.

Tony Nunes has over 22 years’ experience in providing tax advice. He has extensive experience in advising clients on issues affecting cross-border transactions, acquisitions, and restructures, and in all aspects of structuring the ownership and financing of corporations and their operations.
Lishi Huang

Lishi Huang

GGI member firm
Kelly + Partners Chartered Accountants
Advisory, Auditing & Accounting, Corporate Finance, Tax, Fiduciary & Estate Planning
Sydney, Australia
T: +61 2 9933 8866
E: lishi.huang@ kellypartners.com.au
W: kellypartners.com.au

Lishi Huang has over 10 years’ experience advising large corporates and private groups on tax matters and disputes, particularly on land and property transactions and global expansions. She has worked in both private and public sectors, which gives her a unique perspective when advising clients.


Published: Real Estate Newsletter, No. 13, Summer 2021 l Photo: Greg Brave - stock.adobe.com

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