Foreign persons (which includes natural persons and corporations) or foreign trusts that acquire an interest in residential land in South Australia are required to pay a foreign ownership surcharge (the “surcharge”) of 7% of the value of the interest in residential land.

The surcharge applies to:

  • instruments liable to duty (including a statement under Section 71E); and
  • in the case of an acquisition under Part 4, transactions liable to duty;

entered into on or after 1 January 2018.

The surcharge payable is in addition to the duty that is otherwise payable on an acquisition of an interest in land.

Section and Part references relate to the Stamp Duties Act 1923, unless otherwise specified.

An 'acquisition' refers to a conveyance, transfer or acquisition of an interest or, in the case of an acquisition under Part 4, a notional acquisition of an interest in residential land.

When does the surcharge apply from?

The surcharge only applies to:

  • dutiable instruments executed, or taken to have been executed; and
  • in the case of an acquisition under Part 4, transactions entered into;

on or after 1 January 2018.

As such, dutiable instruments executed or taken to have been executed, or in the case of an acquisition under Part 4, transactions entered into, prior to 1 January 2018 are not liable to the surcharge.


Example 1

On 20 December 2017, Peter, a foreign person, enters into a contract for the purchase of residential land. A Transfer is subsequently executed on 19 January 2018.

Peter is liable to pay the surcharge on an acquisition of an interest in residential land as the Transfer, being the dutiable instrument, is executed after 1 January 2018.


If a contract predates the effective date of the foreign ownership surcharge legislation but settlement takes place after 1 January 2018, is the full Surcharge payable?

The foreign ownership surcharge applies. The Commissioner of State Taxation has no discretion to waive the foreign ownership surcharge.

When does the surcharge apply and to what to extent does it apply?

The surcharge applies where:

  • residential land
  • a part of residential land; or
  • an interest in residential land

is acquired.

The surcharge of 7% is payable only to the extent of the value of the interest acquired in the residential land.

Find out more on our Applicable Transactions page.


Example 2

N & O Family Trust, a foreign trust, acquires a 20% interest in residential land.

The market value of the interest acquired is $100,000, being 20% of the total market value of $500,000.

The surcharge amount payable is $7,000, being 7% of the 20% interest acquired, valued at $100,000.


Joint tenants are taken to be tenants in common in equal shares.


Example 3

Jamie and Drew acquire residential land as joint tenants. Jamie is a foreign person and Drew is not.

As Jamie is a foreign person and has acquired a 50% interest in residential land, a surcharge is payable on the acquisition of Jamie’s 50% interest.


How is the surcharge calculated?

The surcharge is calculated based on the value of the interest in residential land, being the value used for duty purposes. The surcharge is in addition to any duty payable.

Find out more on our Calculation of surcharge page.

Calculate the stamp duty and foreign ownership surcharge.

When is the surcharge paid?

The surcharge is paid at the same time that stamp duty is paid.

Find out more on our Payment of surcharge page.

Is a foreign entity, which is a member of a group that is liable to land holder duty under Part 4, also liable for the surcharge?

For the purposes of the land holder provisions under Part 4, a ‘foreign entity’ means a foreign person or a foreign trust.

In addition to the group being liable to land holder duty under Part 4, a foreign entity that is a member of a group that notionally acquires an interest in residential land is liable to pay a surcharge on the value of the interest notionally acquired by the foreign entity.


Example 4

Frank Pty Ltd, Richard Pty Ltd and Ronald Pty Ltd, as a group, acquire 100% (33.33% each) of the shares in a land holding entity. Frank Pty Ltd is a foreign entity and Richard Pty Ltd and Ronald Pty Ltd are not foreign entities.

In addition to the land holder duty payable by the group on the 100% acquisition of the land holding entity, Frank Pty Ltd is liable to a surcharge on 33.33% of the land value.


Legislation

The Foreign Ownership Surcharge in South Australia is administered under the following legislation:

  • Stamp Duties Act 1923
  • Stamp Duties Regulations 2013
  • Taxation Administration Act 1996.

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