Foreign Buyers Duty
From 1 January 2019, foreign buyer/s duty will impose additional 7% duty on the dutiable value for certain transactions and landholder acquisitions involving foreign persons or entities acquiring residential property in Western Australia.
This information has been provided by the Department of Finance
Use form Foreign Transfer Duty Declaration Form to declare whether each purchaser or transferee is a foreign person.
This form must be completed by each person acquiring an interest in land in Western Australia.
|Residential property is:
|1. land in Western Australia that is, is capable of being, or is intended to be, used solely or dominantly for residential purposes; 2. vacant or substantially vacant land in Western Australia that is zoned solely for residential purposes; or 3. any estate or interest in land as described in (1) or (2).
|A foreign person is a foreign individual, a foreign corporation or a foreign trust.
|A foreign individual is:
|A person who is not an Australian citizen, or does not hold a permanent or special category visa. A permanent visa allows a person to remain in Australia indefinitely as an Australian permanent resident. A special category visa is granted to New Zealand citizens who wish to visit, stay or work in Australia. See the Visa Holder Enquiry tool for visa enquiries through the Department of Home Affairs.
|A foreign corporation is:
|• a corporation that was incorporated outside Australia; or • a corporation in which foreign persons have a controlling interest.
|A foreign trust is:
|• a discretionary trust controlled by a foreign person; or • a discretionary trust where one or more foreign persons that are takers in default, together with their associates, hold at least 50 per cent interest in the discretionary trust; or • a trust other than a discretionary trust where one or more foreign persons, together with their associates, hold beneficial interests in at least 50 per cent of the income of the trust.
Residential developer exemption
Land acquired by foreign persons for residential developments is chargeable with foreign transfer duty. If the development will produce 10 or more residential dwellings, or lots on which 10 or more dwellings can be constructed, the foreign transfer duty paid may be reassessed and refunded.
Nominal duty ($20) or transfer duty exemptions
Most dutiable transactions that would be eligible for nominal duty or an exemption from transfer duty will be exempt from foreign transfer duty where the person receiving the residential property is foreign. This includes:
• transfers involving matrimonial or de facto instruments (Family Court Orders)
• deceased estate transfers
• partitions or subdivisions of property eligible for nominal duty
• transfers changing trustees
Commonly asked questions
If I am a foreign person but my transaction is eligible for an exemption or nominal duty ($20) assessment, do I have to pay foreign transfer duty?
If I am a foreign person and I sign a contract to buy residential property before the changes come into effect but settle on the transfer after 1 January 2019, do I pay foreign transfer duty?
Most dutiable transactions that are eligible for a nominal rate of duty or an exemption from duty will be exempt from foreign buyers duty. This includes eligible transactions pursuant to the terms of a will or transactions involving family court orders.
No. If you settle on the property after 1 January 2019 and the transferee(s) on the transfer are the same as the purchasers on the agreement or contract, you will not be liable for the additional duty on the transfer.
If I am an Australian Citizen but my partner is a foreign person, how much foreign transfer duty will I pay?
If I become a Australian Citizen just after I settle and transfer a residential property into my name, can I apply for a refund of the foreign transfer duty?
You only pay foreign transfer duty on the portion of the foreign person's share in the residential property being purchased. If the property was purchased for $800,000 and the buyer who is foreign is a joint tenant (50% interest in the property), transfer duty will apply to the total amount ($800,000) and foreign transfer duty will apply to the 50% share that is being purchased by the foreign person ($400,000 - which is 50% of the purchase price or unencumbered value of the property). The foreign transfer duty payable would be $28,000.
You are not eligible for a reassessment and refund of the foreign transfer duty unless you are no longer foreign before you transfer the property. If you sign an agreement to buy the property before you obtain Australian Citizenship but are granted citizenship prior to settlement and then transfer the property, you will be eligible for a reassessment and refund of the foreign transfer duty charged on the agreement.
Use form FDA42 'Change in Foreign Status' to apply for a reassessment of foreign transfer duty.