Revenue NSW has released updated guidance on surcharge purchaser duty following changes affecting certain Australian-based developers, build-to-rent projects and retirement village transactions. Property businesses involved in NSW residential development should check whether an exemption or refund may now apply.
Revenue NSW published the updated resources on 1 October 2026 following amendments made by the Revenue and Other Legislation Amendment Act 2026. The legislation received assent on 29 June 2026 and amended the Duties Act 1997.
Surcharge purchaser duty is an additional NSW duty that can apply when a foreign person acquires residential-related property. It is charged in addition to ordinary transfer duty, with the current surcharge purchaser duty rate being 9% of the property’s dutiable value. Corporations and trustees can be treated as foreign persons depending on their ownership and circumstances.
The latest changes are therefore particularly relevant to property developers, investment groups and other organisations with foreign ownership interests.
Key highlights for NSW property businesses
1. Australian-based developers may qualify for an exemption or refund
An Australian corporation can sometimes be considered a foreign person for surcharge purchaser duty purposes because of its ownership structure.
Revenue NSW now provides updated guidance on exemptions and refunds available to qualifying Australian-based developers.
Depending on the transaction, relief may be available where an eligible developer acquires residential land and then:
- constructs a new home and sells it to an unrelated purchaser
- subdivides the land for new-home construction and sells the subdivided land after a subdivision certificate is issued, or
- uses the land wholly or predominantly for commercial or industrial purposes.
The Australian-based developer generally needs to be an Australian corporation and must satisfy the relevant statutory requirements within the required timeframe. Revenue NSW states that the applicable development condition must generally be met within 10 years of completion of the transfer.
2. Build-to-rent developments may qualify
Certain eligible build-to-rent developments can qualify for an exemption or refund of surcharge purchaser duty.
Build-to-rent generally involves a multi-unit residential development held under unified ownership and operated as rental accommodation rather than being individually sold.
Revenue NSW confirms that qualifying developments, as well as some transfers of existing qualifying build-to-rent developments, may receive surcharge purchaser duty relief.
The concessions work alongside NSW’s broader build-to-rent tax framework, which can also provide eligible properties with a reduction in taxable land value for land tax purposes.
Businesses considering a build-to-rent project should review both the duty and land-tax consequences before entering into a transaction.
3. New retirement village concessions apply
The 2026 changes also introduce important surcharge purchaser duty concessions for certain retirement village transactions.
An eligible Australian-based developer acquiring residential-related property to construct a new retirement village of at least 50 dwellings, or expand an existing operational village by at least 50 additional dwellings, may qualify for an exemption or refund.
For these provisions, the relevant transfer generally needs to have been entered into on or after 1 July 2026, and construction and first occupation must occur within 10 years of the transfer.
Relief may also apply where a foreign person acquires an existing operational retirement village containing at least 50 dwellings and continues operating it for the required period. Revenue NSW describes an operating period that generally continues for up to five years after completion, subject to the specific statutory conditions.
4. Transfers of retirement village dwellings back to operators can also be exempt
Another change covers situations where a resident leaves a retirement village and the dwelling is transferred back to the village operator.
For eligible transfers entered into on or after 1 July 2026, surcharge purchaser duty may not apply where the purchaser is the retirement village operator and the seller was a resident immediately before the transfer.
This is a specific exemption and the precise transaction structure still needs to satisfy the legislative requirements.
5. The exemptions are not automatic
Businesses should not assume that a qualifying project automatically removes surcharge purchaser duty.
Revenue NSW states that surcharge purchaser duty exemptions and refunds require an application and assessment. In relevant property transactions, a solicitor or conveyancer will generally need to lodge the application with Revenue NSW.
Revenue NSW has also introduced updated eDuties application types and supporting guidance for transactions affected by the 2026 changes.
What this means for your business
For property developers and investment groups, surcharge purchaser duty can represent a substantial additional cost. At a 9% surcharge rate, confirming whether an exemption applies before completing a major property transaction can therefore be important.
If your business is considering acquiring residential-related property in NSW, practical steps include:
- confirming whether the purchaser is treated as a foreign person
- reviewing the ownership structure of any company or trust involved
- identifying whether a developer, build-to-rent or retirement village concession may apply
- checking the required development and operating timeframes
- keeping documents that demonstrate the intended use of the property
- involving your solicitor or conveyancer before settlement
- considering transfer duty, land tax, GST, income tax and financing consequences together rather than separately.
Businesses should also review recent transactions where surcharge purchaser duty has already been paid. Some provisions allow eligible taxpayers to seek a refund or reassessment, subject to the relevant eligibility rules and application deadlines.
For property businesses in Newcastle, Maitland and the Hunter Region, these changes are also a reminder to review the tax structure of a proposed acquisition before contracts are finalised.
Bottrell Accounting provides property tax advice, property tax consulting and accounting support for builders, contractors and developers.
Planning a NSW property transaction or development?
Speak with the Bottrell Accounting team before completing a major property acquisition or development transaction. We can assist with reviewing the accounting and tax implications and work alongside your legal adviser where specialist duty advice is required.
This article provides general information only and does not constitute legal, tax or financial advice. Surcharge purchaser duty exemptions and refunds depend on the particular purchaser, ownership structure, property and transaction. Obtain advice relevant to your circumstances before acting.
