On 29 Nov 2017, the NSW OSR issued Revenue Ruling G 011: Surcharge Land Tax and Duty – Residential Premises that are not Dwellings.
This ruling gives guidelines to help taxpayers identify the types of premises the Chief Commissioner does, and does not, consider to be ‘dwellings’ for purposes of the following ‘surcharges’ on top of ordinary imposts.
- There is a surcharge, on top of existing transfer duty, for ‘foreign persons’ (as defined) who purchase ‘residential land’ (as defined). This was introduced, as a 4% surcharge, in the 2016 NSW Budget for agreements to buy relevant land entered into on or after 21 June 2016. As a result of the 2017 Budget, the surcharge was increased to 8% for agreements entered into on or after 1 July 2017. ‘Residential land’ is defined in s104I of the NSW Duty Act 1997, and is sub-defined, in terms of ‘dwellings’ (in the same section). This ruling is about the meaning of ‘dwellings’. This is further explained on the NSW OSR website
- There is a surcharge, on top of existing land tax, for ‘foreign persons’ (as defined) who own ‘residential land’ (as defined). For the the 2017 Land Tax Year (relevant land held on 31 December 2016) there is a surcharge of 0.75% and for the 2018, and following, land tax years, the surcharge is 2% of the value of the land (which is the normal value for land tax). This value is generally the average of the unimproved land value for the land. ‘Residential land’ is is sub-defined in terms of ‘dwellings’, which is what this ruling is about. This is further explained on the NSW OSR website.
This Revenue Ruling clarifies where the surcharge will not apply to residential premises. It covers things such as: Hotels, Motels and Inns; Hostels and Boarding Houses; Student accommodation; Aged Care and other Care Facilities; Bed and Breakfast accommodation; Caravan Parks; Separately titled rooms, apartments, serviced apartments. The Ruling also outlines the features that indicate that the dwellings are not a hotel, motel, inn, hostel, boarding house or similar premises.
DATE OF EFFECT: The Ruling applies from 21 June 2016.
[NSW OSR website: Ruling G 011; LTN 243, 19/12/17; Tax Month Dec 2017]