UDIA NSW news
Foreign Stamp Duty Surcharge Rebate
A company is defined as 'foreign' when it has a "significant interest" owned by shareholders who are not Australian residents for tax purposes, even if the company is based in Australia.
In order to reduce the negative impact on supply the tax increase may have, the NSW Government has announced a rebate of the 8 percent stamp duty surcharge to Australian-based developers with foreign interests, provided that their dwellings reach the market within 5 years.
The full stamp duty including the surcharge still needs to be paid by the developer when buying land. The rebate is paid on application after the new dwellings are sold.
UDIA NSW is concerned that the planning and development consent process in NSW takes too long for developers to be entitled to the rebate. UDIA has found that the average development takes 7-10 years to approve, build and sell, which is beyond the time limit for the rebate. Also worrying is the pressure it will place on a project's cashflow.
This is poor public policy and counter-intuitive to the Government's goal of fixing the housing affordability crisis in NSW. UDIA NSW is currently consulting with the NSW Government in relation to this issue.