Foreign Buyers Duty – add 7%

As at 1 January 2019, foreign transfer duty and foreign landholder duty came into effect through the Duties Act 2008. An additional 7% duty will apply to certain acquisitions of residential property (including land) where the buyer or transferee (person receiving the property) are foreign persons, including foreign companies and foreign trustees.

What does this mean to you?

Every buyer or transferee that acquires or purchases land or vacant land for residential building in Western Australia is now required to complete a Foreign Transfer Duty Declaration Form within two (2) months of executing the dutiable transaction such as the contract for sale. This applies even if you are not a foreign person.  An example of the form can be viewed here https://goo.gl/nr6oAi

But I have already signed a Contract !

If you have signed a contract prior to 1st January 2019 with settlement due in 2019, and the transferee(s) on the transfer are the same as the purchasers on the agreement or contract, you will not be liable for the additional duty on the transfer.

How do I calculate the total duty payable?

The Office of State Revenue has online transfer duty calculators HERE which can be used to calculate duty estimates.

Who is responsible for making the declaration?

The buyer and or transferee is responsible for completing the Foreign Transfer Duty Declaration Form. This cannot be completed by a representative for a buyer


 A foreign person is a foreign individual, a foreign corporation or a foreign trust.


A foreign individual is:
  •  A person who is not an Australian citizen, or does not hold a permanent or special category visa.
  • A permanent visa allows a person to remain in Australia indefinitely as an Australian permanent resident.
  • A special category visa is granted to New Zealand citizens who wish to visit, stay or work in Australia.
A foreign corporation is:
  •  a corporation that was incorporated outside Australia; or
  • a corporation in which foreign persons have a controlling interest.
A foreign trust is:
  • A discretionary trust controlled by a foreign person; or
  •  a discretionary trust where one or more foreign persons that are takers in default, together with their associates, hold at least 50 per cent interest in the discretionary trust; or
  •  a trust other than a discretionary trust where one or more foreign persons, together with their associates, hold beneficial interests in at least 50 per cent of the income of the trust.

Important!

There are some exemptions, some split percentage arrangements and situations where nominal duty will apply.  It will be important to seek professional advice as early as possible.

If you would like more information on this issue, please contact Philip Brunner at Bailiwick Legal – phil@bailiwicklegal.com.au or call (08) 9321 5451. 

The above information is a summary and overview of the matters discussed. This publication does not constitute legal advice and you should seek legal or other professional advice before acting or relying on any of the content.

 

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