Property Taxes in Australia

Australian property owners are responsible for paying taxes, but the amount of these expenses will vary for Australian non-tax residents and tax residents. This article explains the different types of Australian property taxes you may be liable for and how much you pay as a non-tax resident of Australia.

Of course, every individual’s circumstances differ, and it is always strongly advised to speak to a tax expert directly in order to access your specific finances correctly and efficiently.

Information within this article must not be taken as legal advice and should provide only a better understanding of what the process may or may not entail.

If you would like to speak to a trusted Australian tax specialist, please use our free introduction service and we will connect you with one of our Australian tax partners who will be able to assist you with property taxes in Australia, as well as any other Australian tax matters you may have.

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Establishing whether you are a resident or non-resident of Australia

Determining which Australian taxes are applicable to your situation as an expat is vital as the rules are different for non-residents and residents of Australia.

If you are unsure of your Australian tax residence status, please read our article that will help you determine your Australian tax residence status: How to establish whether you are an Australian tax resident

Capital Gains Tax for Non-Residents

Capital gains tax will be due when selling assets and property. As a non-tax resident of Australia, you will be subject to these fees which will also need to be added to your Australian income listed on your tax return for the financial year in which the sale has occurred.

Australian citizens that have lived in their primary residence for over 12 months are eligible for an exemption, but this exemption of taxes is not available to non-residents.

For foreign residents that are selling their Australian property that is worth more than $750,000 this will mean the person buying your property will be expected to withhold 12.5% of the purchase price.

This would then be sent to the Australian Taxation Office and could then be claimed back when your Australian tax return is filed. This process is called ‘Foreign Resident Capital Gains Tax Withholding.’

Types of taxable Australian property for non-tax residents include the following:

• A capital gains tax asset that you have used to run a business through a permanent establishment within Australia
• Houses, apartments, land, or commercial building
• A prospecting, quarrying, or mining right
• Contract for an off-plan property purchase

Stamp Duty for Non-Residents

Stamp duty is required for all property transactions in Australia, and no one is exempt. Varying states charge differing surcharge rates to foreigners.

The state governments have imposed additional stamp duty charges in the last few years, some ranging up to 8%. This surcharge is applied on top of the standard stamp duty charge.

Other governments throughout other developed countries have done the same in an attempt to help curb the ever-increasing demand for foreign investment into their residential properties, as well as generate extra tax revenue and control their overall housing affordability.

This Foreign Buyers’ Stamp Duty currently applies in New South Wales and Victoria at 8%, and most other states at 7% and does not apply to property purchases in the Northern Territory or the Australian Capital Territory.

Income Tax for Non-Residents

Non-residents only need to file their tax return if they have income sourced from within Australia, including general wages, capital gains on Australian land and buildings and business income.

Income tax in Australia for non-residents is higher than what it is for tax residents.

The table below shows the taxable income as a non-resident in Australia as of 2022-2023 financial year:

You will be able to claim certain property-related expenses, where appropriate, as deductions to lower your overall fees.

Land Tax for Non-Residents

Foreigners will have to pay annual land taxes on their Australian investment properties, which will be calculated based on the total taxable value of the property itself, as well as the state in which it is located.

However, the Northern Territory is an exception as it does not impose the Land tax.

This type of tax will apply to all holiday homes, company units, residential property, and vacant owed land. Other property such as farms, charity lands and your primary residence is usually exempt from land taxation charges.

Get your property taxes right, speak to an Australian tax specialist

It is possible to work out what property taxes you owe in Australia, however, it isn't straightforward and the cost of making a mistake will be much greater than seeking help from an experienced Australian tax specialist.

When you request an introduction to one of our trusted Australian tax partners, you will also receive an initial free consultation where you will be able to ask basic questions and get an idea of your situation and decide whether you wish to proceed with formal, paid services.

All of our partners are fully qualified and experienced in assisting Australian expats as well as people who have connections to Australia whether they still live there or not.

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