Foreign Buyer Duty
Navigating the expectations of buyers in understanding their requirement to remit foreign buyer duty is inevitable. The declaration must be made by the buyer and it is strongly advised that you do not assist buyers in making any determination on their behalf where there is any doubt.
Foreign individuals are classified as an individual who is not an Australian citizen, or does not hold a permanent or special category visa. In other words, if you are either (i) Australian citizen; (ii) Australian permanent visa holder; or (iii) a special category visa holder – you are not foreign.
Confusion can occur when dealing with New Zealanders who benefit from close ties to Australia. OSR have noted that:
Provided a New Zealand citizen has a valid special category visa when they acquire the property, they will not be liable to pay foreign transfer duty. If the visa lapses, is cancelled or revoked for any reason prior to settlement, they would need to notify OSR.
It is recommend you advise your clients, where doubt exists, to submit a web enquiry or contact OSR on 9262 1100.
To find out more refer buyers to the Visa Holder Enquiry tool for visa enquiries hosted by the Department of Home Affairs.
Source: 23rd January 2019 AICWA e-Newsletter
Foreign Buyers Duty
For transactions executed on or after 1 January 2019, an additional 7% duty will be chargeable on the dutiable value of certain acquisitions of residential property by foreign buyers.
Each person acquiring land in Western Australia must complete a foreign buyers declaration form HERE declaring whether they are a foreign person.
The Online Duties system will be modified to allow self-assessment of most dutiable transactions that are chargeable with foreign buyers duty.
For the purposes of the foreign buyers duty, residential property is –
1. land in Western Australia that is, or is capable of being, or is intended to be, used solely or dominantly for residential purposes;
2. vacant or substantially vacant land that is zone solely for residential purposes; or
3. any estate of interest in land described in (1) or (2).
A foreign person includes a foreign individual, corporation or trust.
See the foreign transfer duty HERE and foreign landholder duty fact sheets HERE for information about foreign persons and residential property.
Exemptions or nominal transfer duty
Most dutiable transactions that would be eligible for nominal duty or an exemption from transfer duty will also be exempt from foreign buyers duty. This includes certain transactions involving family court orders and matrimonial agreements, deceased estate transactions and partitions of residential property.
Face-to-face customer education sessions commenced in December 2018. Visit our OSR's education page to register now for upcoming sessions HERE.
Foreign buyer duty publications, frequently asked questions and other support material is available HERE
For more information on foreign buyers duty, see the legislation available on the Western Australian Parliament website HERE
Watch the Video HERE
Source: 19th December 2018 AICWA e-Newsletter
In what is suspected to be a “man in the middle scam”, funds were unwittingly deposited by a purchaser into an east coast bank account in the lead up to a settlement and then transferred by the scammers to an overseas account resulting in a significant loss of $557,000.
Typically, this type of scam will occur when the contents of person’s private emails are accessed and details of future financial transactions are seized upon by scammers. Victims will be contacted by what they believe to be their agent via a genuine email address when in fact it is the scammer who has assumed the identity of a recipient requesting the transfer.
Scammers are attracted to targeting property professionals and their clients due to the potential for high yield lucrative opportunities.
THE REGISTRAR OF TITLES’ WITNESSING AND IDENTITY VERIFICATION
REQUIREMENTS FOR TRANSFER OF LAND DOCUMENTS EXECUTED BY THE
TRANSFEROR(S) OUTSIDE OF AUSTRALIA
An example of documents requiring a qualified witness;
Application for Lost Title
Application by Personal Representative
Transfer of Land
When a client is overseas, the witnessing and verification of identity must be by consular officials, so be aware some travel may be required in order to attend an Australian Embassy or Consulate to have documents witnessed and certified.
Some relevant information for Overseas Sellers
Landgate (The Titles Registry in Western Australia) have provided specific guidelines for the signing of the Transfer together with requiring specific forms of identification.
The witness on a Transfer must be an Australian consular officer when the execution of a Land Titles Office document occurs outside of Australia.
An Australian consular officer is defined by section 145(4) of the Transfer of Land Act as a person appointed to hold or act in any of the following offices (being an office of the Commonwealth) in a country or place outside the Commonwealth.
This Customer Information Bulletin contains additional information and clarifies the procedures for the witnessing of transfer of land documents executed by transferors outside of Australia and the corresponding client identity verification required to be undertaken by the witness.
This CIB provides clarification and further details in relation to the instructions provided in CIB No. 206 of 18 August 2011.
The following Registrar’s requirements only relate to transfer of land documents where the transferor(s) executes the transfer outside of Australia.
The requirements as set out in this CIB are summarised as follows:
transfers of land executed by transferors outside of Australia are required to be witnessed by an Australian consular officer; prior to witnessing the execution of the transfer of land the Consular Officer is to undertake an identity check of the transferor(s) and provide certified copies of all the identity documents sighted; and conveyancers are to provide the original certified copies of the identity documents sighted by the Consular Officer who witnessed the transfer of land to the Registrar of Titles at the time of lodging the transfer of land at Landgate.
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