South Australia and Western Australia: the 7% foreign buyer duties

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Kooky

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A buyer who is not an Australian citizen or permanent resident meets two layers of rules when buying a home in Australia. The first is federal and decides whether the purchase may happen at all. The second belongs to the state where the land sits, and it is a matter of money: an extra charge added to the duty every purchaser pays. South Australia calls its version the foreign ownership surcharge. Western Australia calls its version foreign transfer duty. Both are set at 7%, and that shared number hides how differently the two states have written the detail.

This guide sets out the two regimes as their own revenue offices describe them: RevenueSA for South Australia, and RevenueWA for Western Australia. It covers who counts as foreign, which land is residential, which transactions are caught, how the 7% is worked out, what has to be declared, and what happens when a buyer's status changes after the purchase. The worked examples use the verified rate and are labelled as examples.

RevenueSA foreign ownership surcharge pages and the RevenueWA foreign transfer duty fact sheet dated 23 May 2025.

Two names, two Acts, two starting dates

South Australia's surcharge sits in the Stamp Duties Act 1923, supported by the Stamp Duties Regulations 2013 and the Taxation Administration Act 1996, according to RevenueSA. It applies to dutiable instruments executed on or after 1 January 2018. RevenueSA describes the charge in one line: foreign persons and foreign trusts that acquire an interest in residential land in South Australia pay a surcharge of 7% of the value of that interest, in addition to the ordinary duty.

Western Australia followed a year later. The RevenueWA fact sheet on foreign transfer duty, dated 23 May 2025, says an additional 7% duty applies when foreign persons buy residential property from 1 January 2019, and that the rules are in Chapter 3A of the Duties Act 2008. A Western Australian government guidance page updated on 7 May 2026 puts it the same way: foreign buyers duty is an additional duty of 7% on the dutiable value.

The South Australian start date has a hard edge that RevenueSA spells out. What matters is the date of the dutiable instrument, which for an ordinary purchase is the transfer, not the contract. Its example is a contract signed on 20 December 2017 with the transfer executed on 19 January 2018: the surcharge is payable. RevenueSA adds that the Commissioner of State Taxation has no discretion to waive the surcharge where settlement falls after 1 January 2018, even when the contract came first. In Western Australia the fact sheet says liability for duty usually arises on the date the transaction document is signed, which for a contract is the day all parties have signed it.

Who counts as a foreign individual

The two states draw the line for individuals in nearly the same place. RevenueSA defines a foreign natural person as any individual who is not an Australian citizen, not a permanent resident of Australia, and not a New Zealand citizen holding a special category visa, which it identifies as subclass 444. Its examples make the edges plain. A dual national who holds Australian citizenship is not a foreign person. A permanent resident is not a foreign person. A temporary visa holder is, and pays the surcharge on acquiring an interest in residential land.

RevenueWA's fact sheet defines a foreign individual as someone who is not an Australian citizen, not a permanent visa holder and not a special category visa holder, with the visa terms taken from the federal Migration Act 1958. The fact sheet does not mention New Zealand citizens by name; the special category visa is the route by which they fall outside the definition. It gives the Partner visa (subclass 820) and Bridging visas A, B, C and E as examples of temporary visas.

Two points from RevenueSA matter for couples. Marriage to an Australian citizen brings no exemption: the surcharge applies to the value of the interest the foreign spouse acquires. And proof of permanent residence rests on the visa itself. RevenueSA says the status is shown by holding a permanent visa under section 30(1) of the Migration Act 1958, identifiable by its visa number, and that a case of unclear status can be submitted to the Commissioner through RevenueSA Online for assessment.

Companies: the 50% line

Both states treat a company incorporated overseas as foreign, and both use 50% as the ownership line for a company incorporated in Australia. The wording differs.

RevenueSA says a corporation is foreign if it is incorporated in a jurisdiction that is not an Australian jurisdiction, or if a foreign person or foreign trustee, alone or together with others, holds 50% or more of its shares or can cast, or control the casting of, 50% or more of the maximum votes at a general meeting. The holdings of several foreign persons are added together. In RevenueSA's example, two foreign persons each hold 25% of a company; the combined 50% makes the company a foreign person.

RevenueWA's fact sheet cites section 205C of the Duties Act 2008. A corporation is foreign if it was incorporated outside Australia or if foreign persons hold a controlling interest in it. A controlling interest exists where foreign persons and their associates control at least 50% of the voting power or potential voting power, or hold at least 50% of the issued shares.

The word "associates" is where Western Australia reaches further. Under section 205B, as the fact sheet summarises it, associates include family members and related corporations, among others. For the foreign status tests, the interests of foreign persons and all their associates are combined, whatever the associate's own status.

Trusts: where the two states differ most

Trusts are common in Australian property ownership, and here the two states use different tests.

For a trust with fixed interests, RevenueSA says the trust is foreign where foreign persons hold, in total, a beneficial interest of 50% or more of the capital of the trust property. RevenueSA adds that a superannuation fund whose sole member is a foreign person is a foreign trust. RevenueWA's test for a non-discretionary trust looks at income instead: the trust is foreign where foreign persons, together with their associates, hold beneficial interests in at least 50% of the income.

For discretionary trusts, South Australia uses a list of roles. According to RevenueSA, a discretionary trust is foreign where one or more of these is a foreign person: a trustee, a person with a power to appoint under the trust, an identified object of the trust, or a person who takes trust capital in default. One foreign co-trustee is enough, even if the other trustee is not foreign. One named foreign beneficiary is enough.

The word "identified" does real work. RevenueSA says an object must be named in the deed to count, and that a class or range of beneficiaries does not. Its example is a foreign spouse who is not named but would fall within a class such as "the spouse of" a named person: that does not make the trust foreign. RevenueSA also says that changing a trustee, a holder of a power of appointment or a taker of capital in default would not cause a dutiable resettlement of the trust, a point of interest to anyone reviewing a deed before a purchase.

Western Australia asks about control. Under section 205D, as the fact sheet describes it, a discretionary trust is foreign if a foreign person controls it, meaning that person can directly or indirectly influence the vesting of capital or the distribution of income, including as trustee. It is also foreign where foreign takers in default, together with associates, hold an interest of at least 50%. A trustee of a foreign trust is a foreign person for the duty even when the trustee is not foreign in their own right.

The associate rule applies to trusts too. In a fact sheet example, the units held by the Australian spouses of foreign unit holders are counted together with the foreign holders' own units.

Which land is residential

Neither charge applies to commercial or farming land as such. Each state defines the residential land that is caught, and the definitions do not match.

In South Australia, RevenueSA says land is residential if the Commissioner, after considering information from the Valuer-General, determines one of three things. The first is that the land is predominantly used for residential purposes. The second is that the land is not used for a particular purpose but should be taken to be residential because of improvements that are residential in character. The third covers vacant land, or vacant land with only minor improvements, in a planning zone that envisages residential use; it does not cover land whose zoning allows other uses, primary production aside. The test is applied at the date of the instrument. RevenueSA adds that community plan entitlements, such as a car park entitlement attached to a residential apartment, are residential land.

In Western Australia, the fact sheet cites section 205E of the Duties Act 2008. Residential property is land that is used, capable of being used, or intended to be used solely or dominantly for residential purposes, or land that is vacant or substantially vacant and zoned solely for residential purposes. Where several lots are bought, each is assessed separately. The value also includes chattels linked to the use of the property.

The test is applied when liability arises. In a fact sheet example, a foreign company buys a house planning to turn it into a veterinary clinic. The house is residential when liability arises, so foreign transfer duty is chargeable.

On accommodation businesses the states agree in part. RevenueSA, quoting its Information Circular No. 103, says hostels, hotels, motels, serviced apartments and short term unit accommodation are treated as commercial and are not residential land. Western Australia excludes land intended solely or dominantly for commercial residential premises, including hotels, motels, inns, hostels and boarding houses.

They disagree on housing for older people. RevenueSA says retirement villages, aged care facilities and other premises best described as long term accommodation remain residential, so the surcharge applies. Western Australia's fact sheet excludes land intended solely or dominantly for an aged care facility and land intended for a retirement village.

Which transactions are caught

The everyday case is a foreign person buying a house or apartment. RevenueSA's list of acquisitions goes further: an off-the-plan apartment, the transfer of a leasehold interest, the assignment of an interest in a contract, an easement and an option to purchase all appear, as does acquiring or increasing a prescribed interest in a company or unit trust that holds residential land. The surcharge applies whether or not the land is bought as an investment.

South Australia also closes off the idea of paying the price and delaying the paperwork. RevenueSA says that where the purchase price has been paid, the foreign person has acquired an interest, and duty and surcharge are payable. If no transfer has been stamped, a statement under section 71E of the Stamp Duties Act 1923 must be lodged and stamped, surcharge included. A licence to occupy or a caveat does not remove that requirement.

Western Australia's fact sheet excludes easements, security interests and carbon rights from residential property, so an easement is treated differently in the two states. It also covers transfers that normally attract only nominal duty. Where an owner later transfers a 50% interest to a foreign spouse, foreign transfer duty is chargeable on that transfer unless it was paid on the original purchase.

The general rule in both states is that the extra charge follows the ordinary duty. RevenueSA says that if the interest acquired is not liable to duty, it is not liable to the surcharge, and gives the example of residential land passing under a will to a foreign sibling. RevenueWA says a transaction that is exempt or charged nominal duty is generally treated the same way for foreign transfer duty, subject to the exceptions just described under section 205Y(3), which do not apply where the transferor acquired the property before 1 January 2019.

How the 7% is calculated

In both states the 7% is charged on the foreign person's share, not automatically on the whole property, and it is added to ordinary duty, never substituted for it.

RevenueSA says the surcharge is based on the value of the interest for duty purposes and applies only to the extent of the interest acquired. Joint tenants are treated as tenants in common in equal shares, so where one of two joint tenants is foreign, the surcharge applies to 50%. Its own example is a foreign trust acquiring a 20% interest valued at A$100,000 in land worth A$500,000: the surcharge is A$7,000. Where a purchase includes residential and non-residential land, RevenueSA says ordinary duty is calculated on all the land but the surcharge only on the residential part.

RevenueWA's example shows how the charge sits beside concessions. An Australian citizen and a foreign person buy a A$400,000 home as joint tenants, and the first home owner rate of duty applies. Transfer duty is nil. Foreign transfer duty is still charged on the foreign buyer's half: 7% of A$200,000, or A$14,000.

The table below adds three worked examples to those two. They are illustrations computed from the 7% rate, with assumed prices, and they show the extra charge only. Ordinary duty is a separate amount under each state's own scale, which is outside this guide.

RevenueSA publishes one example with ordinary duty in it, and it shows how the layers stack when a company changes hands. An Australian company buys residential land valued at A$1,000,000 on 1 July 2018. On 31 July 2018 a foreign person acquires 50% of its shares. Three amounts follow. Land holder duty on the 50% interest, valued at A$500,000, is A$21,330. The surcharge on that interest is 7% of A$500,000, or A$35,000. And because the company has now become foreign within three years of buying, it owes the surcharge on the land itself: 7% of A$1,000,000 is A$70,000, reduced by the A$35,000 already paid, leaving A$35,000. The total is A$91,330.

Declaring and paying

In South Australia the surcharge is paid at the same time as stamp duty, RevenueSA says.

Western Australia builds a declaration into every purchase. According to the state government's guidance page, Form FDA41, the Foreign Transfer Duty Declaration, is used to declare whether each purchaser or transferee is a foreign person, and each person acquiring an interest in land in Western Australia must submit it. A separate form, FDA46, does the same job for a person acquiring an interest in a landholder. The fact sheet says transfer duty is generally payable by the purchaser or transferee.

When status changes after the purchase

The two sets of guidance also differ on what happens later.

South Australia looks forward for three years. RevenueSA says that if a person, company or trust that was not foreign at acquisition becomes foreign within three years, the surcharge is imposed retrospectively. The period starts on the acquisition date, which RevenueSA defines as the settlement date. Its example is a buyer who holds a permanent visa at purchase and ceases to hold it two years later: he has become a foreign person and the surcharge is payable.

RevenueSA says interest and penalty tax may apply under the Taxation Administration Act 1996, and that its Compliance Services branch draws on data from the Australian Taxation Office, the Australian Securities and Investments Commission, the Foreign Investment Review Board and the Department of Home Affairs. One situation is outside the rule: if the interest was transferred before the owner became foreign, no surcharge is payable.

The rule runs the other way as well. Under section 72(5) of the Stamp Duties Act 1923, RevenueSA says, a refund is available where a person was foreign when acquiring the interest but ceases to be foreign no more than 12 months after the acquisition. It is claimed with the Application for refund of stamp duty form.

The Western Australian fact sheet describes a narrower adjustment tied to the gap between contract and transfer. Where an agreement is assessed while the purchaser is foreign, and the purchaser is no longer foreign when the property is transferred, an exemption applies, claimed with Form FDA42.

Developers and ex gratia relief

Both states make room for foreign-owned developers, by different routes.

In Western Australia the route is in the Act. The fact sheet says foreign persons pay foreign transfer duty when buying land for residential development, but the duty may be reassessed and refunded if the development produces ten or more dwellings, or lots on which ten or more dwellings can be built. Eligibility and timeframes are in sections 205ZA, 205ZB and 205ZC of the Duties Act 2008, and Form FDA43 is used. The fact sheet does not set out the timeframes themselves.

In South Australia the route is an ex gratia scheme approved by the Treasurer and described in RevenueSA's Revenue Ruling SDA012. Version 2 of the ruling, issued on 29 January 2020 and marked as current by RevenueSA, sets relief on a case-by-case basis for acquisitions leading to a significant development: 20 or more allotments or lots developed or redeveloped for residential use, or, outside Metropolitan Adelaide, a development making a significant contribution to its region. The purchaser must also meet its regulatory obligations and any Foreign Investment Review Board requirements. The payment equals the surcharge only and depends on the rest of the duty being paid. An applicant can ask for in-principle pre-approval or for final approval, and RevenueSA may recover the payment if the development differs materially from the application.

What the published guidance leaves open

Three limits of this guide are worth stating. First, neither charge decides whether a foreign person may buy at all. RevenueSA's own page notes that federal restrictions on foreign purchases of established homes have applied since 1 April 2025 and refers readers to the Australian Taxation Office.

Second, the ordinary duty scales of the two states were not part of the pages read for this guide, so the worked examples stop at the extra 7%. Third, the RevenueWA fact sheet points to Commissioner's Practice DA 44 on what counts as residential property. It does not give lodgement deadlines or penalty rates for foreign transfer duty.

The rate is the easy part. The tests for trusts, the treatment of aged care land and the three-year look-back are where South Australia and Western Australia stop resembling each other.

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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