Four Key Measures 

1. Payroll Tax
Key measures announced

  • $1,000 increase in the Payroll Tax Rebate under the Jobs Action Plan for entities with 50 or fewer employees that employ a new employee from 31 July 2016. The first year rebate remains $2,000 but the second year rebate increases from $3,000 to $4,000.
  • Employers with more than 50 employees will have access to the scheme up to 31 July 2016.
  • The Small Business Grant available to employers which are not registered for payroll tax remains unchanged.

2. Land Tax
Key measures announced

  • A 0.75% surcharge land tax of the taxable value of NSW residential property owned by a foreign person starting with the 2017 land tax year (owned at midnight on 31 December 2016).

3. Duties
Key measures announced
A 4% surcharge purchaser duty will apply from 21 June 2016 in relation to the purchase of residential real estate in NSW by foreign persons.

  • The surcharge will also apply to transactions that incur landholder duty where the underlying property(ies) are classified as residential and one or more of the purchasers is a foreign person.
  • The 12 month deferral for the payment of transfer duty on the purchase of off-the-plan residential property will cease for foreign person purchasers.

Who is a foreign person?
Broadly a foreign person means an individual not ordinarily resident in Australia, a corporation in which such an individual has a substantial interest, a trustee of a trust in which such an individual holds a substantial interest or a foreign government.

4. New 10% withholding regime
This NSW Government announcement coincides with the start (1 July 2016) of the Federal Government’s new 10% non-final withholding tax on property sales above a $2milion threshold by a “foreign resident”.