Increases to surcharges for foreign investors in Qld and NSW and to land tax in the ACT: update

Queensland increased duties and land tax surcharges from 1 July 2024, with New South Wales changes to come into effect from 1 January 2025.  In the ACT, the general land tax rate has increased from 1 July 2024

New South Wales

New South Wales Treasurer Daniel Mookhey flagged an increase to foreign investor surcharges from 1 January 2025. From 1 January 2025, foreign purchasers of residential land will pay an additional 9% duty, while foreign owners of residential land will pay an additional 5% surcharge land tax from the start of the 2025 land tax year.

This will mean that, for a foreign purchaser of residential land with a dutiable value exceeding $3,636,000, purchaser duty after 1 January 2025 will be 16%. Additionally, land tax will be charged at 7% of the land value for land tax purposes where an exemption is not available.

The Government has said that the increase is expected to encourage more properties to be made available to New South Wales residents.

Queensland

Queensland Treasurer Cameron Dick handed down the Queensland State budget on 11 June 2024. Within the Treasurer's budget speech, he stated that Queensland would bring its foreign owner transfer duty surcharge into line with Victoria and New South Wales (at 8%), while also raising the foreign owner land tax surcharge to 3%.

This is part of a broader "Homes for Queenslanders" initiative, with these measures estimated to result in additional taxation revenue of approximately $420 million over the next 4 years.

Australian Capital Territory

While the Australian Capital Territory Government did not seek to increase conveyance duty (purchaser duty), or to impose a foreign duty surcharge, there was an increase to land tax.

Land tax in the Australian Capital Territory comprises a fixed charge and a variable charge. From 1 July 2024, the fixed charge for land tax is $1,612, a 5% annual increase. Variable charges meanwhile see an additional base value threshold applied at $1,000,000 and revised percentage rates charged on the average of the property's unimproved value over up to 5 years. Here is how these percentage rates differ from the 2023-24 year: