Kiwis Are Exempt from Tax and Duties – It Depends

Many New Zealand Citizens come and live in Australia in recent years. Even under covid-19, the two countries create travel bubble for their people to travel freely without restriction. A one-way “travel bubble” opened in October 2019 allowing Kiwis to enter Australia without quarantine. Two months later, New Zealand pledged to drop its border restriction in the first quarter of 2021, making the bubble reciprocal.

When Kiwis purchaser properties in Australia, they often question whether they enjoy the same benefits as permanent residents and citizens of Australia. Di Lizio provides answers to some frequently asked questions for Kiwis who want to purchase properties in Australia.

Do I need to apply to FIRB?

When New Zealand Citizens come to Australia, they will be granted Special Category Visa 444 (SCV 444) upon arrival. Currently, New Zealand Citizens are exempt from application to Foreign Investment Review Board (“FIRB”) for purchasing real estate in Australia. The guidelines in FIRB change every year. But up until the latest guideline which was updated on 15 January 2021, Kiwis are still exempt from applying to FIRB for approval before they can purchase a property in Australia.

Am I exempt from land tax surcharge?

Unlike what many people may think, Kiwis are not automatically exempt from land tax surcharge when they purchase real estates in Australia. In NSW, in order to be exempt from land tax surcharge, Kiwis who hold SCV 444 need to be ‘ordinarily residents’ in Australia. An ordinarily resident is an individual who stays in Australia for 200 or more days in the last 12 months before a contract of sale is signed. That means if Kiwis want to buy a property in Australia, they must come to Australia and stay for more than 200 days before they can claim for land tax exemption.

What about stamp duty? Are Kiwis exempt?

Unlike land tax surcharge exemption, the 4% stamp duty surcharge does not require Kiwis to be ordinarily residents. However, a different criterion applies. If New Zealand citizens want to be exempt from stamp duty surcharge, the property they buy must be their primary residence and they need to stay in the property for 200 or more days from the date of contract of sale. That means, as long as the property is a SCV 444 holder’s primary residence, he/she does not need to pay for any stamp duty surcharge when stamp duty is due around settlement for the property. However, the State Revenue will audit in the following two years. If it is found out that they have not resided in the primary residence for over 200 days or more within 12 months from the date of contract, they will be served a notice of assessment and the stamp duty surcharge has to be paid.  

What we can do to help

Purchasing a property is a big decision for individuals. Di Lizio has years of experience in assisting purchasers and vendors in reviewing contract of sale and conveyancing matter. Our lawyers will guide you through in every step of your sale or purchase. We charge a fixed fee for all conveyancing matters. Our team has lawyers who speak fluent English, Indonesian, Italian, Mandarin and Cantonese. Feel free to contact us anytime for a quote or help with your property matter.