New South Wales surcharge purchaser duty: the 9% and the 200-day tests

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Kooky

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A buyer who is a foreign person under New South Wales law pays two duties on a home in the state, not one. The first is transfer duty, the stamp duty every purchaser knows. The second is surcharge purchaser duty, which Revenue NSW, the state's revenue office, sets at 9% of the property's dutiable value. On the office's own example of an A$1 million home, the surcharge is more than twice the transfer duty.

The amount is easy to compute. The hard part is knowing whether it applies, because "foreign person" in this state tax does not simply mean "not a citizen". A permanent resident who has travelled a great deal can be caught. A New Zealand citizen who has just arrived can be caught, then released by living in the home. A holder of a temporary work or student visa is caught with no residence test to rely on. This guide sets out the rule as Revenue NSW publishes it in 2026: the property it covers, the test for individuals, the two 200-day counts, the special visa classes, the sum, the deadline and the refunds. It covers the state duty only. The national approval rules for foreign buyers are a separate regime, run by a different government, and are not described here.

Revenue NSW, surcharge purchaser duty pages, last updated between May and October 2026.

What the surcharge is

Revenue NSW describes surcharge purchaser duty as a state tax that may be payable when foreign persons acquire an interest in residential-related property. It attaches to three kinds of transaction: an agreement for the sale of land, a transfer of property, and a declaration of trust. A sale contract is the usual case, but a transfer with no contract behind it, such as one between relatives, is covered in the same way.

Three conditions must all be met, according to the revenue office. The purchaser is a foreign person under Chapter 2A of the Duties Act 1997, the New South Wales statute that holds the duty. The property is residential-related and is in New South Wales. And the purchaser is not eligible for an exemption. Take away any one of the three and the surcharge falls away.

The surcharge is paid in addition to transfer duty, never instead of it, and the two are assessed separately. Revenue NSW makes a point that surprises some buyers: a person who is exempt from transfer duty may still have to pay the surcharge if they are a foreign person. Being relieved of one duty says nothing about the other.

The duty belongs to the purchaser. For a vendor, and for the agent acting for the vendor, it changes nothing in the contract price or in the vendor's own costs. It matters to them for a practical reason only: it is a large sum that the buyer must have ready by settlement, on top of the price and the ordinary duty.

Which property is residential-related

The surcharge applies to residential-related property, a term Revenue NSW defines by list. The list is wider than "a house or a flat":

• a parcel of land with one or more dwellings on it, including dwellings still under construction;
• a strata lot that is lawfully occupied as a separate dwelling, or suitable for that;
• a parcel of vacant land zoned or designated for residential use, or principally residential use;
• a utility lot whose use is restricted to the owner or occupier of a strata lot;
• a land use entitlement that gives the right to occupy a building or part of one as a separate dwelling, such as company title;
• an interest in any of the above;
• an option to purchase residential land in New South Wales;
• a partnership interest, where the partnership's property is residential-related.

Three consequences follow from that list. A block of vacant land is caught when its zoning is residential, even though nobody can live on it yet. A home under construction is caught as soon as the dwelling is being built. And the surcharge can arise before any land changes hands, because an option to purchase is itself on the list.

The definition also has edges. Residential land does not include land used for primary production that is exempt from land tax, so a working farm is treated differently from a home. Revenue NSW adds that foreign persons who acquire residential premises that are not dwellings may not be liable. Whether a particular building is a dwelling for this purpose depends on its facts, and it is a question for the revenue office's own rulings, not for this guide.

Who is a foreign person: the test for individuals

Revenue NSW states the rule from the other side. An individual is generally a foreign person unless they fall into one of the classes it lists. An Australian citizen is never a foreign person for this duty, wherever they live. Everyone else has to fit one of the remaining classes, and each of those carries a condition.

The last row is the one that settles most cases. Revenue NSW treats the holder of a temporary visa as a foreign person, and it describes a temporary visa as one that expires on a set date or carries a condition that may prevent a further stay. Holders of bridging visas are foreign persons too. Length of time in the country does not change that: a person on a temporary visa who has lived in Sydney for several years is still a foreign person for this duty, because the first limb of the residence test, a stay not limited in time, is missing. The only temporary visa holders with a way out are those on the partner and retirement subclasses in the table.

Revenue NSW's Revenue Ruling G009 explains how foreign person status is determined, for individuals, corporations and trusts alike.

The two 200-day tests

The figure of 200 days appears twice in the rules, and the two uses are easy to confuse. They count different things, over different periods, in different places.

Ordinarily resident looks backwards. A person is ordinarily resident in Australia, on the revenue office's definition, when two things are true. Their stay is not limited in time, which means they are a permanent resident or hold a partner visa of subclass 309 or 820. And they were in Australia for at least 200 days within the 12 months before the liability date. The liability date is generally the contract date. The days counted are days in Australia, anywhere in the country, not days in New South Wales and not days in the property. Revenue NSW says the day of entering Australia and the day of leaving both count.

As simple arithmetic on that rule, a 365-day period leaves room for 165 days abroad. A permanent resident who spent six months overseas in the year before signing has been out of the country for longer than that and does not pass the backward-looking test, however long they have held their visa.

The residence requirement looks forwards. A permanent resident who fails the first test is not lost. Revenue NSW provides a second class, the exempt permanent resident, for a person who is not ordinarily resident and who meets three conditions: they buy as an individual and not as a trustee, their stay is not limited in time, and they meet the residence requirement. That requirement is to live in the property continuously for at least 200 days within 12 months from the agreement or contract date, as their principal place of residence.

The differences matter. The forward test is about the purchased home itself, not about Australia in general. The 200 days must be continuous, where the backward test simply adds days up. And the exemption is given before the condition is met: Revenue NSW says it grants the exemption on condition that all the requirements are fulfilled. The office's page for individuals does not set out what follows when the 200 days are not completed, but it does say that a person who did not meet conditions applying after the transaction is encouraged to make a voluntary disclosure.

A principal place of residence has its own definition. Revenue NSW describes it as the home where the person lives most of the time. It excludes investment properties and holiday homes. A person can have only one at any time, anywhere in the world, so a home kept and lived in abroad competes with the one bought in New South Wales. It has to be a place the person really lives in, not merely one they own, it can be a house or a strata apartment, and it must be used continuously and solely for residential purposes.

New Zealand citizens, partner visas and retirement visas

Three groups get their own treatment.

New Zealand citizens. A New Zealand citizen holding a Special Category visa, subclass 444, pays no surcharge when either test is met: at least 200 days in Australia in the 12 months before the liability date, or 200 continuous days living in the property as a principal place of residence within 12 months from the contract date. A New Zealander who moved long ago passes the first. One who has just arrived can rely on the second by moving into the home. One who buys an investment property soon after arriving passes neither. Revenue NSW's first home buyer pages repeat the warning in plain terms: New Zealand citizens and permanent residents who are not ordinarily resident in Australia may still owe the surcharge. People who arrived in Australia before the subclass 444 visa was introduced are told to contact the office.

Partner visas. The Partner (provisional) visas, subclasses 309 and 820, are temporary visas, yet Revenue NSW treats their holders as people whose stay is not limited in time. A holder is therefore outside the surcharge on the same footing as a permanent resident: by being ordinarily resident, or by qualifying as an exempt permanent resident through living in the home. Holding the visa is not enough alone. One of the two 200-day tests still has to be met.

Retirement visas. Holders of a Retirement visa, subclass 405 or 410, pay no surcharge when they buy as individuals, not as trustees, and live in the property as their principal place of residence for 200 continuous days within 12 months from the contract date. Revenue NSW limits this to transactions from 1 July 2019. As with the exempt permanent resident, the relief is conditional on the residence being completed.

Companies and trustees

Foreign status is not confined to people. Revenue NSW states that individuals, corporations and trustees of a trust may all be foreign persons, and that the surcharge reaches each of them when they acquire residential-related property.

For a corporation, the office says the answer depends on whether foreign shareholders hold a substantial interest or an aggregate substantial interest in it. For a trustee, the test varies with the type of trust. The detailed thresholds and the treatment of each trust type are set out on separate Revenue NSW pages and in Revenue Ruling G009; they were not read for this guide and are not restated here. What can be said from the pages that were read is narrower but still useful: buying through a company or a trust does not place a purchase outside the surcharge, and two of the reliefs for individuals, the exempt permanent resident class and the retirement visa class, are expressly closed to a person who buys as a trustee.

How much: the surcharge on top of transfer duty

The rate is 9% of the dutiable value, according to Revenue NSW's page as updated on 20 August 2026. The pages read for this guide give the current rate only; earlier rates and the dates they applied sit on a separate page of the revenue office.

Dutiable value is the higher of two figures: the purchase price agreed and the market value of the property. Between unrelated parties the two are normally the same. They part company when a property changes hands below its worth, between relatives for instance, and in that case the duty follows the market value. The duty is charged at the liability date, which is generally the contract date.

Transfer duty is worked out on the same dutiable value, on a sliding scale. Revenue NSW publishes this scale for the 2026-27 financial year and says the rates are adjusted each year for inflation, with the contract date deciding which year's scale applies.

Revenue NSW's own example takes a foreign person buying a A$1 million home at 2026-27 rates. The surcharge is 9% of A$1 million, A$90,000. The transfer duty is A$11,602 plus A$4.50 for every A$100 of the A$613,000 above A$387,000, which is A$27,585, giving A$39,187. The two duties together come to A$129,187, close to 13% of the price.

The same method gives the figures for other prices. The three cases below are worked examples built for this guide from the published rate and scale. Each assumes a sole purchaser who is a foreign person, a dwelling in New South Wales, a price equal to market value, a contract dated in 2026-27 and no exemption.

The surcharge is a flat percentage while transfer duty climbs in steps, so the surcharge is the larger of the two at every price in the table. For the A$800,000 case the transfer duty is A$11,602 plus 4.5% of A$413,000, or A$18,585. For the A$1,500,000 case it is A$52,237 plus 5.5% of A$210,000, or A$11,550.

Buying with someone else: the share rule

Couples and families often buy together, and it is common for one purchaser to be a citizen and the other not. Revenue NSW's rule is that the surcharge is charged in proportion to the share of the property acquired by foreign persons. The foreign status of one purchaser does not spread to the whole property, and the status of the other purchaser does not shelter it.

A worked example shows the effect. Assume two people buy a A$1,500,000 house in equal shares in 2026-27. One is an Australian citizen. The other holds a temporary visa and is a foreign person. Transfer duty is charged on the whole dutiable value and is A$63,787, as in the table above. The surcharge is charged on the foreign person's half only: 9% of A$750,000, which is A$67,500. Both duties together are A$131,287, against A$198,787 had the foreign person bought alone.

The share rule also explains one of the two refund grounds described below: when the share acquired by a foreign person is reduced, the surcharge that was assessed on the larger share can be revisited.

Declaring status and paying on time

The process starts with a declaration, not with a tax bill. Revenue NSW requires each purchaser or transferee to complete a Purchaser/transferee declaration: form ODA076i for individuals, and form ODA076ni for non-individuals, a group that includes corporations. The declaration is where foreign status is stated, and every purchaser completes one, not only those from abroad.

A buyer who is not a foreign person has more to prove than one who is. Revenue NSW asks for certified copies of documents establishing identity, citizenship and residency. Its examples are passports, birth certificates, Australian visas and international movement records from the Department of Home Affairs, the federal department that records arrivals and departures. Those movement records are what the backward-looking 200-day count is checked against. The revenue office notes that a solicitor or conveyancer can help gather the certified documents.

The deadline is the earliest of several dates. Where the transaction involves a transfer, the surcharge is due by settlement. It is also due within three months of signing the contract for sale; where there is no contract, the three months run from the transfer; where there is a deed, from the date of the deed. Whichever date comes first is the one that counts.

For an ordinary sale the practical result is simple. As an illustration, take a contract signed on 1 July 2026 that settles six weeks later, on 12 August 2026: settlement comes well inside three months, and the duty is due then. Revenue NSW says the surcharge is generally paid with the other funds at settlement, that the legal representative manages the payment, and that the payment options, electronic funds transfer and BPAY among them, are listed on the Duties Notice of Assessment. The order reverses when settlement is set a long way out. As the rule is worded, a contract that settles more than three months after signing reaches the three-month limit first, so the duty falls due before the keys change hands. Arrangements specific to particular types of contract were not read for this guide.

Late payment has a price. Revenue NSW charges interest daily on overdue duty until it is paid in full. The surcharge pages do not state the rate.

Exemptions, refunds and what does not exempt

For individuals, the exemptions are the classes already described: the exempt permanent resident, the New Zealand citizen who meets a 200-day test and the retirement visa holder. Revenue NSW also lists exemptions and refunds for certain businesses:

• Australian-based developer corporations that acquire residential land to construct and sell housing;
• corporations and foreign persons acquiring land for build-to-rent developments, or existing build-to-rent property;
• certain retirement village developments, and transfers to operators.

The conditions of each sit on separate pages that were not read for this guide. The law in this area also moved in 2026. Revenue NSW reports that the Revenue and Other Legislation Amendment Act 2026 received assent on 29 June 2026 and amends Chapter 2A of the Duties Act 1997, affecting some build-to-rent transactions and some retirement village acquisitions or transfers. Its landing page does not summarise the changes.

A refund is a different thing from an exemption: the duty was correctly assessed, and something changed afterwards. Revenue NSW names two grounds. The purchaser's status changed, so that they were not a foreign person on the date of the transfer. Or the share acquired by a foreign person was reduced. The first ground reflects the gap between the contract date, when liability is fixed, and the transfer, which can be weeks or months later.

The first home buyer point deserves a second look, because the two regimes can meet in one purchase. The assistance scheme concerns transfer duty. The surcharge is a separate duty with its own test, and Revenue NSW states that it is still calculated on the share the foreign person acquires. A couple buying a first home, one of them a foreign person, can therefore be within the scheme and still owe the surcharge on that person's share.

Records, checks and the second surcharge

The file does not close at settlement. Revenue NSW says it may investigate any individual who has been liable for duties in New South Wales over the past five years, and it asks purchasers to keep the records of their duty assessment, with copies of the documents required, for at least five years.

For anyone relying on the forward-looking residence requirement, the records that count are those showing that the home really was the principal place of residence. The revenue office's examples are everyday papers:

• electricity, gas, water or internet bills in the purchaser's name at the property;
• home and contents insurance for the property;
• a driver licence or proof of age card showing the address;
• confirmation of electoral enrolment;
• bank statements, salary slips or Australian Taxation Office correspondence sent to the address;
• evidence that the mailing address was updated with government and other services.

Each is dated, which is what makes it useful: together they show when occupation began and that it continued through the 200 days.

One further tax sits beside this one. Revenue NSW notes that foreign persons who own residential property in the state may also be liable for surcharge land tax, a recurring charge on ownership, where surcharge purchaser duty is a single charge on acquisition. Revenue Ruling G009 covers foreign person status for both. The land tax surcharge has its own rates and its own pages, which were not read for this guide.

Revenue NSW offers two online aids for the purchase itself: a questionnaire that works through foreign status, and a calculator that estimates the surcharge. Neither replaces the assessment, which is made on the declaration and the documents lodged for the transaction.

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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