Foreign persons are liable to pay the following land tax surcharges for owning land in NSW and Victoria commencing from the 2017 land tax year:

Click here to view table. 

In both States, land owners are obliged to notify the Commissioner of their foreign status. 

Victoria

When to notify the Commissioner?

In Victoria, foreign persons (referred to as “Absentee Owners”) as at 31 December must notify the Commissioner of their foreign status before 15 January of the following year.

How do you notify the Commissioner?

The land owner should notify the Commissioner through the State Office Revenue portal with their customer number and assessment number. In respect of jointly owned land or a land tax group, the notification could be completed by a representative owner/member, or each owner/member can separately notify the Commissioner.

Once notified, the foreign status is assumed to be current unless the Commissioner is notified otherwise.

Penalties for failure to notify

Failure to comply with the above-mentioned notification requirements constitutes a notification default (entitled “Absentee Owner Notification Default”) and will attract penalty tax, starting at 25 percent of the unpaid additional land tax, which may then be remitted, increased or reduced depending on the particular circumstances. In particular, the penalty tax rate will be reduced to 5 percent if a voluntary disclosure is made by the taxpayer before the Commissioner initiates an investigation into a known or suspected notification default.

Further, a taxpayer will be responsible for a notification default which arises from the action or failure of the taxpayer’s representative or a third party, unless it could be shown that the taxpayer had taken reasonable care. The liability for penalty tax, however, still remains with the taxpayer.

NSW

When to notify the Commissioner?

A foreign person is required to notify the Commissioner of their foreign status by the due date of their land tax assessment.

How do you notify the Commissioner?

An information brochure will be provided as an attachment to the land tax assessment as it issues, outlining:

  • what land tax surcharge is; and
  • how to notify the Commissioner of the foreign status. Broadly, the notification can be completed on the online portal using the Client ID and correspondence ID.

Once notified, the Commissioner will issue the land tax surcharge assessment for payment from March 2017.

Penalties for failure to notify

Unlike Victoria, there is no specific penalty for notification defaults in NSW if a taxpayer fails to notify the Commissioner of their foreign status. However, failure to pay the land tax surcharge will still constitute a tax default which may result in interest charges and penalty tax being imposed. Similar to Victoria, penalty tax will start at 25 percent of the unpaid land tax, which may then be remitted, increased or reduced depending on the particular circumstances.