Rising land tax surcharges are changing the numbers for foreign property owners in NSW.
If you own property in New South Wales as a foreign investor, the NSW land tax surcharge is becoming a bigger part of your annual costs. The rate climbed to 5% in 2025, up from 4% the year before. This charge sits on top of your standard land tax and applies every year based on the value of your land. Understanding how it works, what exemptions may apply and how to plan ahead can save you thousands. If you need help structuring your Australian home loan around these costs, talk to Serres Property Finance.
Rate history
The NSW land tax surcharge for foreign property owners has risen steadily over the years:
This is not a one-time payment. It is an ongoing annual cost added to your regular land tax bill. The increases reflect a broader government push to manage foreign investment in residential property.
How it's calculated
The surcharge is a flat percentage applied to the total land value of your property holdings in NSW. Here is a simple example to illustrate the cost increase.
Take Michael, a foreign investor with two residential properties:
At the 2024 rate of 4%, Michael’s surcharge was $48,000 per year. At the 2025 rate of 5%, that rises to $60,000. That is an extra $12,000 every year. For investors with higher land values, the difference is even more significant.
Note that this is a simplified example. Your actual tax bill will also include standard land tax and may vary based on your specific circumstances.
Available exemptions
Not every foreign-owned property is automatically subject to the surcharge. A number of exemptions exist:
To claim an exemption, you will typically need to provide documentation such as Foreign Investment Review Board approvals, management agreements or occupancy contracts. Having these ready ahead of time avoids delays with your application.
Other 2025 changes
The land tax surcharge is not the only change affecting foreign investors in 2025. Two other significant measures also take effect:
These changes together mean significantly more tax exposure for foreign investors across the board. Planning ahead is essential.
How to prepare
With costs rising, now is the time to review your position. Here are four steps worth taking:
At Serres Property Finance, we work with investors navigating the Australian lending landscape. Talk to us about structuring finance that works alongside your tax obligations.
Common questions
Q: Is the NSW land tax surcharge the same as stamp duty?
No, they are different. Stamp duty is a one-time charge paid when you purchase a property. The land tax surcharge is an ongoing annual charge applied to the land value of your property while you hold it. Both can apply to foreign investors, so it is important to budget for both.
Q: Does the surcharge apply if I live in the property myself?
You may be eligible for a principal place of residence exemption if you live in the property for more than 200 days a year in Australia. This exemption does not apply automatically. You need to apply for it and provide evidence of your residency, so check the requirements early and keep records throughout the year.
Q: Can a mortgage broker help me manage these increased costs?
Yes. A broker can review your current loan structure and explore whether refinancing or restructuring your debt could reduce your ongoing repayment burden. At Serres Property Finance, we help foreign investors find home loan arrangements that work with their full financial picture, including tax costs.