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Calculating foreign purchaser additional duty
How to work out your additional duty.
Key information
Foreign purchaser additional duty is calculated on the dutiable value of the residential property being acquired by the foreign purchaser.
The additional duty rate is 8%. It applies on top of land transfer duty and is calculated before any concessions are applied.
We calculate additional duty based on the information we receive in the Digital Duties Form.
Dutiable value is the greater of the price you pay for the property and the market value of the property. It includes GST, if GST is payable on the purchase.
Example 1: calculating additional duty
Andrew is a foreign natural person. He buys a house in Melbourne for $1 million. The price reflects the market value of the house.
Andrew must pay additional duty of $80,000 ($1 million × 8%). This additional duty applies on top of land transfer duty.
Exemptions and concessions
Foreign purchaser additional duty is calculated on the dutiable value of the residential property, before any concessions are applied to the transfer.
Example 2: calculating additional duty before applying concessions
Kate is a foreign natural person. She buys a residential property off the plan for $500,000. She will live there as her principal place of residence (PPR). Kate is eligible for both the PPR concession and the off-the-plan concession.
Additional duty is calculated on the purchase price before applying any concessions. Kate must pay additional duty of $40,000. This is $500,000 (the price paid before any concessions, including the off-the-plan concession, are applied) × 8%.
This example assumes the market value of the property acquired at the date of contract was not more than $500,000.
If a transfer is exempt from land transfer duty, it is also exempt from foreign purchaser additional duty.
Example 3: exempt transfer
Lee is a foreign natural person. She is transferred a residential property from her spouse for no consideration, which she will live in as her PPR.
This transfer is exempt from land transfer duty. It is therefore also exempt from foreign purchaser additional duty.
Buying property with others
If a foreign purchaser acquires residential property with others, additional duty is calculated on the share of the property the foreign purchaser acquired.
Example 4: buying property with others
Don, Liam and Emily jointly purchase a residential property in Melbourne for $600,000. They take 3 equal shares worth $200,000 each.
Emily is a foreign purchaser. Emily must pay foreign purchaser additional duty of $16,000 ($200,000 × 8%).
Landholder acquisitions
When a foreign purchaser makes a relevant acquisition in a landholder, additional duty applies by reference to the residential landholdings of the landholder. This is in addition to the landholder duty payable.
Example 5: landholder acquisition
Evergreen Horizon Pty Ltd owns commercial property worth $20 million and residential property worth $10 million.
Zara is a foreign natural person who acquires a 50% interest in Evergreen Horizon Pty Ltd.
Foreign purchaser additional duty is calculated on $5 million, being $10 million (the value of the residential property held by the Evergreen Horizon Pty Ltd) × 50% (the interest in Evergreen Horizon Pty Ltd being acquired).
Zara must pay foreign purchaser additional duty of $400,000 ($5 million × 8%).