New South Wales: the yearly taxes on a foreign-owned home in 2026

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Kooky

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The cost of buying a home in New South Wales as a foreign person is paid once. The cost of owning it comes back every year, and it comes from two governments that do not share a calendar, a definition or a form. The state charges land tax, and adds a surcharge land tax that only foreign persons pay. The Commonwealth asks for a return on how the dwelling was used, and charges a vacancy fee when it stood empty for half the year.

This guide is about that yearly bill and nothing else. It sets out, from the pages of Revenue NSW and the Australian Taxation Office, what the surcharge is charged on, the rate and how it has risen, who is a foreign person for the annual tax, how the surcharge sits on ordinary land tax, what happens to the home exemption, the concession for Australian-based developers, and where the federal vacancy fee fits. The sums are worked in Australian dollars from the published rates. The duties paid at purchase and the federal approval rules are separate subjects and are left out.

Revenue NSW surcharge land tax pages, last updated between November 2025 and April 2026.

Three charges, two governments

A foreign owner can meet three recurring charges on one home. Two belong to New South Wales and are assessed by Revenue NSW, the state's revenue office. One belongs to the Commonwealth and is run by the Australian Taxation Office. They are worked out on different bases, which is why they cannot be added up from a single figure such as the purchase price.

What the surcharge is charged on

According to Revenue NSW, surcharge land tax is charged on the unimproved land value of residential land owned by a foreign person as at midnight on 31 December each year. Unimproved means the land alone, without the buildings on it. The revenue office's page on calculating land tax says those values come from the NSW Valuer General and are set as of 1 July each year.

The tax is therefore not a percentage of what the home cost or what it would sell for.

Residential land has a wide meaning. Revenue NSW lists land with one or more homes on it, or where homes are being built; strata lots that are lived in as separate homes or are suitable for that; qualifying utility lots under section 4 of the Strata Schemes Management Act 2015; land use entitlements that give the right to occupy a building or part of one as a separate home; and vacant land, or land the Chief Commissioner considers mostly vacant, that is zoned or designated for residential or mainly residential use. A block bought to build on is inside the tax from the first 31 December, before any home exists. Land used for primary production is excluded, even when it would otherwise fit the list.

The surcharge for a land tax year, which runs from 1 January to 31 December, is fixed by who owned the land at midnight on the 31 December before it. Revenue NSW says of land tax that the tax covers the full following year and is not worked out pro rata, so that selling early in the year does not reduce that year's tax. The pages read for this guide state the 31 December rule for the surcharge in the same terms but do not repeat the sentence about pro rata, so it is given here for land tax only.

The rate, and how it has risen

Revenue NSW gives three rates since 2018. The surcharge was 2% for the 2018 to 2022 land tax years, 4% for 2023 and 2024, and has been 5% from the 2025 land tax year onwards. Commissioner's Practice Note CPN 039, issued by the revenue office on 6 March 2026, dates the surcharge itself from the 2017 land tax year; the rate that applied in that first year is not on the pages read.

The chart applies the three published rates to one illustrative parcel with a land value of A$800,000, held constant so that only the rate moves.

The second feature of the rate is the absence of a floor. Revenue NSW puts it in one line: a tax-free threshold does not apply to surcharge land tax. Ordinary land tax leaves the first A$1,075,000 of land value untaxed in the 2026 land tax year. The surcharge starts at the first dollar, so an owner whose land is far too modest to attract land tax still receives a surcharge assessment.

Who is a foreign person for the yearly tax

For individuals, Revenue NSW states the rule from the outside in. A person is generally a foreign person unless they are an Australian citizen, or a permanent resident who has lived in Australia for 200 days or more in a calendar year. The days do not need to be consecutive. The office gives the mirror image as well: a permanent resident who lives overseas for 165 days or more in a calendar year, or 166 in a leap year, is treated as a foreign person and may be liable.

Practice Note CPN 039 gives the test its formal name, ordinarily resident, and its two limbs. The individual was physically in Australia for at least 200 days in the 12 months before 31 December, and their presence in Australia is not limited in time by law. One who fails the day count is treated as foreign for that land tax year.

Two things follow. The first is that the test is taken again every year. Because the days are counted afresh before each 31 December, status can change from one assessment to the next without any change of visa. The second is that the presence must not be limited in time by law, which is a separate limb from the day count.

The pages read list only citizens and ordinarily resident permanent residents as outside the definition. They do not say how New Zealand citizens holding a special category visa are classed for the yearly tax, and they point to Revenue Ruling G 009 for the full definition. That ruling was not read for this guide, so the question is left open here.

Ownership through an entity does not avoid the test. A company may be a foreign corporation, Revenue NSW says, if foreign persons hold a substantial interest in it; the page does not give the percentage. A trust may be liable if any number of its beneficiaries are foreign persons, and the office says this covers special, discretionary and fixed trusts.

How the surcharge sits on ordinary land tax

The surcharge is payable in addition to any ordinary land tax. It does not replace it and is not credited against it. Revenue NSW assesses the two on different bases, and four differences decide the bill.

The threshold. Land tax for the 2026 land tax year is A$100 plus 1.6% of the land value above the general threshold of A$1,075,000. Above the premium threshold of A$6,571,000 it is A$88,036 plus 2% of the excess. The surcharge has neither threshold.

The land counted. The land tax threshold applies to the combined value of all the taxable land an owner holds in the state, residential or not. The surcharge is assessed parcel by parcel and on residential land only. In the revenue office's own example, an owner with residential land valued at A$500,000 and commercial land valued at A$700,000 pays land tax of A$2,100 on the combined A$1.2 million, and a surcharge of A$25,000 on the residential parcel alone. For a building of mixed use, the office says an apportionment factor is used.

The value used. For land tax, Revenue NSW averages the three most recent land values. The surcharge pages speak of the unimproved land value and their examples use one figure for both taxes; they do not state whether the average applies to the surcharge too.

Co-owners. The surcharge applies only to the foreign owner's share. Revenue NSW says there are no joint assessments and no secondary deductions for surcharge land tax: the foreign owner's share is issued as a secondary assessment, and co-owners who are not foreign persons are not liable for it. Its example is a parcel with a land value of A$2.1 million owned in equal shares by a foreign person and a non-foreign person. Land tax on the whole is A$16,500. The surcharge is 5% of the foreign owner's A$1,050,000, or A$52,500, and falls on that owner alone.

Put together, the first two differences mean a surcharge can be due where no land tax is. In another of the office's examples, a foreign owner whose only land is a residential property valued at A$500,000 pays no land tax, because the value is under the threshold, and A$25,000 of surcharge.

The home exemption does not carry over

Land that an owner uses as a principal place of residence can be exempt from ordinary land tax in New South Wales. A foreign owner cannot assume that exemption deals with the surcharge. Revenue NSW states that the surcharge applies even if the property is exempt from regular land tax.

The surcharge has its own, narrower exemption for an intended principal place of residence. Practice Note CPN 039 describes it as a second chance for permanent residents who fail the ordinarily resident test, and says it has applied since the 2018 land tax year. The revenue office's page on the exemption lists three groups who can claim: holders of permanent visas, holders of partner (provisional) visas of subclass 309 or 820, and holders of retirement visas of subclass 410 and 405. The page does not mention any other temporary visa.

The conditions are set out in the practice note. The person must be a permanent resident at midnight on 31 December of the previous year. They must intend to use and occupy the land as their principal place of residence for a continuous period of 200 days in the land tax year, and intend to be physically present in Australia for a continuous period of 200 days. The Chief Commissioner must be satisfied of that intention. A declaration of the intention must be lodged, and so must the land tax return required by section 12 of the Land Tax Management Act 1956.

The word that separates this test from the status test is continuous. To be ordinarily resident, 200 days scattered across the year are enough. To keep the exemption, the 200 days must run unbroken. The practice note gives the case of an owner who lived in the home for 150 days, travelled for 30 and lived there for a further 50: 200 days in the home in all, but no continuous period of 200, and no exemption.

Several limits apply. The exemption covers only the principal place of residence, not other residential land such as an investment property. Only one property worldwide can be a person's principal place of residence, the exemption page says. The home cannot be rented out or dealt with in a way that is inconsistent with that use. On the other hand, the home does not have to be the person's residence on the taxing date: the practice note says the exemption can apply where a person buys and moves in after 31 December.

The Chief Commissioner may waive the continuous presence requirement for a brief absence in exceptional circumstances. The practice note's examples are attending a funeral, caring for a sick or dying relative, and the marriage of an immediate family member, and it says absences of up to 21 days are generally accepted as brief, with each case assessed on its facts. Absence for work is not an exceptional circumstance in its examples. The practice note records amendments that commenced on 19 May 2022 and reads its examples from the 2023 land tax year; the exemption page says that from 2023 the owner must occupy the home and be physically in Australia for a continuous 200 days in the calendar year.

When the residence requirement is not met, the consequences are spelled out. The surcharge is reassessed as if the exemption had never applied. The failure is treated as a tax default under the Taxation Administration Act 1996. Interest is charged, and penalty tax may apply where there was a failure to take reasonable care. The rates of interest and penalty tax are not on the pages read.

Claiming an exemption: dates and documents

None of the surcharge exemptions is applied automatically. Revenue NSW says the owner must claim by updating their land tax details, which means lodging a return in its Land Tax Online service. The deadline is 31 March of the relevant tax year or the due date of the assessment notice, whichever comes first.

For the home exemption the office asks for a visa grant notice, evidence that the property is used as the principal place of residence, and one of two documents. An owner who was assessed before and has since lived in the home for 200 continuous days supplies an international movement record for the relevant tax year. An owner who was not ordinarily resident in the previous year and intends to live in the home in the current one supplies a declaration of intention to use and occupy it for 200 continuous days.

A late claim is still possible. In the office's example, an owner who lodges after receiving an assessment gets an amended assessment that removes the surcharge, while the land tax and the interest that built up on it remain payable. The exemption is also open to review. Revenue NSW says its reviews look at the previous five years, that an owner under review receives a notice of investigation, and that being granted the exemption for one year does not guarantee it for later ones.

The state dates and the Commonwealth date fall as follows for an owner who has both obligations.

The pages read do not give the dates on which surcharge assessments are issued or fall due, nor the instalment options.

The concession for Australian-based developers

A company can be Australian by registration and foreign by ownership. Revenue NSW addresses that case directly. An Australian-based developer, on its definition, is an Australian corporation that owns and develops residential land into residential or commercial properties in Australia. It must be incorporated under the Corporations Act 2001, hold an Australian Business Number and have an active registration with the Australian Securities and Investments Commission. Such a corporation is treated as foreign when a substantial interest in it is held by shareholders who are not ordinarily resident in Australia, and it is then liable for the surcharge unless an exemption or concession applies.

The exemption or concession is available in three situations: the land is used for constructing and selling new homes; the land is being subdivided for constructing and selling new homes; or the land is used wholly or predominantly for commercial or industrial purposes by the corporation or a related body corporate. The page brings Australian trustee companies within its scope.

There are two ways in. A developer can claim the exemption by lodging a land tax return by 31 March or by the due date of the assessment notice. A developer that paid the surcharge without obtaining an exemption can apply for a refund where the land was used for one of the three purposes. The refund has a double time limit: the claim is made within 12 months of the home being sold or of the subdivision certificate being issued, and no later than 10 years after the land was acquired. Revenue NSW states the 10-year limit for land acquired after 21 June 2016.

The detail is in Revenue Ruling G013 v2, which was not read for this guide; what happens when a planned development does not go ahead is not stated on the page.

Revenue NSW names two further exemptions without detail on the pages read: one for residential land used for commercial purposes and one for build-to-rent.

The Commonwealth's vacancy fee

The federal charge works on a different question: not who owns the land, but whether the dwelling was used. According to the Australian Taxation Office, a foreign owner pays a vacancy fee if the dwelling is vacant for 183 days, or 6 months, or more in one vacancy year. The obligation to lodge a yearly return applies to anyone who made a foreign investment application for residential property after 7:30pm AEST on 9 May 2017, or who bought under a developer's exemption certificate applied for after that time.

The vacancy year is each 12-month period starting on the dwelling's occupation day, which the office gives as settlement, or the day the occupancy certificate is issued for a new dwelling. It is not the calendar year or the financial year. Stays of under 30 days do not count as occupation.

The amount is tied to the fee paid when approval was sought. For vacancy years starting from 9 April 2024, the vacancy fee is double the foreign investment application fee; for earlier vacancy years it equals that fee. The office's example is an application fee of A$13,200, which gives a vacancy fee of A$13,200 for the years ending in July 2023 and July 2024 and A$26,400 for the year after.

The application fee depends in turn on the kind of dwelling. On the office's scale for 1 July 2026 to 30 June 2027, the fee for a new or near-new dwelling valued at A$2 million or less is A$31,300 and the fee for an established dwelling in the same band is A$93,900. The office publishes the two scales as separate tables and draws no comparison between them; setting them side by side, as this guide does, each amount on the established dwelling scale is three times the amount in the same band of the other. The vacancy fee is then double the application fee paid. A vacant new dwelling in that band costs A$62,600 for the year, the figure the office itself gives. By this guide's arithmetic, a vacant established dwelling whose owner paid A$93,900 would cost twice that, A$187,800. The office adds that from 1 April 2025 to 30 June 2029 foreign persons cannot buy established dwellings unless a limited exception applies.

The return is due within 30 days after the end of the vacancy year, and the fee is paid at lodgement or within 30 days of lodging. As a worked example, a dwelling settled on 1 March 2025 has a first vacancy year ending on 28 February 2026 and a return due by 30 March 2026, one day before the state's exemption deadline. An owner who does not lodge on time may be liable for the fee regardless of how the dwelling was used, and an infringement notice or a civil penalty is possible; the office's pages do not state the amounts. Records must be kept for at least 5 years after each vacancy year.

Worked examples: the yearly bill in A$

The examples below use the 2026 land tax year rates published by Revenue NSW. Each assumes one foreign person who is the sole owner, holds no other land in the state, has no surcharge exemption, and is not exempt from ordinary land tax on the property. The land values are assumptions.

In the middle case the surcharge is nearly eleven times the ordinary land tax. If that house were the owner's home and exempt from ordinary land tax, but the owner did not meet the separate surcharge exemption, the yearly state bill would fall by A$6,900 and no further: A$75,000 would remain.

Shared ownership changes the sum. Take a house with a land value of A$1.8 million owned half each by a foreign person and an Australian citizen. The surcharge is 5% of A$900,000, or A$45,000, assessed to the foreign owner alone.

The vacancy fee is then added in a year when it applies. Suppose the apartment in the first row is a new dwelling bought for A$1.2 million with an application fee of A$31,300 paid on the 2026-27 scale. In a year when it is let on a 12-month lease, the recurring charges described in this guide come to A$20,000. In a year when it stands empty for 183 days or more, the vacancy fee of A$62,600 brings them to A$82,600. The fee actually charged follows the application fee that was paid when the owner applied, which may differ from the current scale.

What the sources leave open

Several points that affect a yearly bill are not settled by the pages read for this guide, and they are named here instead of guessed at.

• The percentage of ownership that makes a substantial interest in a company, and the full foreign person definition in Revenue Ruling G 009, including the position of New Zealand citizens and of holders of temporary visas other than the subclasses named above.
• Whether the three-year average of land values used for land tax is also used for the surcharge.
• The dates on which surcharge assessments fall due, and the rates of interest and penalty tax.
• The amounts of the federal infringement notices and civil penalties for a late vacancy fee return.
• The conditions of the exemptions for commercial use and for build-to-rent projects.

Each of those depends on the owner's own circumstances and on the wording of the ruling or the assessment concerned.

Kooky, from Shaka

Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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