Written by

Steven Lee

Mortgage Director, ODIN Mortgage & Tax

10+ years in Australian banking and mortgage lending

Last reviewed

Updated on: October 7, 2026 View profile →

Australian citizens living overseas are not automatically exempt from foreign purchaser stamp duty surcharges when buying property back home. Whether you pay thousands of dollars in additional duty depends almost entirely on which state or territory the property sits in, and the rules are inconsistent, sometimes counterintuitive, and still evolving in 2026. The short answer: most states that impose a surcharge do not exempt Australian citizens based on citizenship alone if they are non-residents at the time of purchase. Knowing the exceptions before you exchange contracts can mean the difference between paying a surcharge of several percentage points or paying none at all.

ODIN Mortgage is regulated under ASIC and the National Consumer Credit Protection Act (NCCP). This article is general information only and does not constitute personal credit advice.

What Is the Foreign Purchaser Stamp Duty Surcharge?

The foreign purchaser surcharge is an additional layer of stamp duty applied on top of standard transfer duty when a “foreign person” acquires residential property in Australia. It is imposed at the state and territory level, meaning each jurisdiction defines the surcharge rate and the definition of “foreign person” independently ^[1].

• The surcharge is charged as a percentage of the dutiable value of the property.
• It applies to residential and, in some states, primary production land ^[1].
• Rates and definitions vary significantly by state and are subject to change; always verify current figures with the relevant state revenue office.

The critical insight for expats is that the surcharge was designed to target foreign nationals, not Australian citizens. Yet the legislative drafting in most states uses “foreign person” definitions anchored in visa and residency status rather than citizenship. That gap is where Australian expats get caught.

Does Being an Australian Citizen Protect You from the Surcharge?

Building on the definitional gap above, the harder question is whether Australian citizenship provides any automatic protection, and in most states, it does not if you hold a non-resident visa or are domiciled overseas at the time of purchase ^[2].

The definition of “foreign person” in most state legislation mirrors the Foreign Acquisitions and Takeovers Act 1975 framework, which classifies individuals as foreign persons if they are not ordinarily resident in Australia, regardless of their citizenship. An Australian citizen living in Singapore or Dubai who has not maintained Australian residency status can fall squarely within this definition.

• Australian citizens temporarily abroad may still be considered Australian residents for duty purposes in some states if they can demonstrate a continuing connection to Australia, but the threshold varies and the burden of proof sits with the buyer.
• Permanent residents living overseas face a similar risk, as PR status alone does not guarantee exemption if the holder is no longer ordinarily resident in Australia.
• Dual citizens need to assess both their Australian and foreign citizenship status, particularly in states that apply treaty-based exemptions based on the citizenship of the foreign country ^[6].

How Does Each State and Territory Treat Foreign Expat Buyers in 2026?

Stepping back from the general principle, the practical picture differs materially by jurisdiction. The table below summarises the surcharge position across states and territories as at 2026. Rates and exemptions are subject to change and depend on individual circumstances and current state revenue office policy ^[2][4][5].

Note: All figures and policies above are subject to change. Verify directly with the relevant state revenue office before exchanging contracts.

What Are the Treaty-Based Exemptions, and Do They Apply to You?

A related but distinct question is whether international tax treaty obligations override state-level surcharges. In NSW and some other states, Australia’s tax treaties with specific countries have been used as grounds to exempt foreign citizens of those countries from the surcharge ^[6].

The countries currently recognised under this framework include New Zealand, Finland, Germany, and South Africa ^[6]. Citizens of these countries purchasing residential property may be exempt from surcharge purchaser duty under certain conditions, as assessed by the relevant state revenue office ^[3][6].

For Australian expats, the treaty mechanism is largely irrelevant to their own surcharge position (since the exemption applies to the foreign citizenship, not Australian citizenship). However, it matters in two scenarios:

• An Australian expat purchasing jointly with a spouse or partner who holds one of the treaty-country citizenships.
• A dual-citizen expat who also holds citizenship in a treaty country.

How Can Australian Expats Reduce or Avoid the Surcharge Legitimately?

Beyond the treaty question, there are practical structuring considerations worth understanding before purchase. None of these are guarantees, and outcomes depend on individual circumstances, lender policy, and state revenue office assessments.

• Re-establishing Australian residency before purchase: If an expat returns to Australia and re-establishes ordinary residency before exchanging contracts, they may no longer meet the foreign person definition. The timing and evidence requirements are strict and vary by state.
• Purchasing through the right entity: Corporate and trust structures can sometimes alter surcharge exposure, but they can also trigger different surcharge rules. This requires specific legal advice from a qualified practitioner.
• Choosing the right jurisdiction: For investors with flexibility on location, the ACT and NT do not charge a stamp duty surcharge. The ACT does apply an ongoing land tax surcharge for foreign owners, which may affect long-term holding costs ^[5].
• Timing the visa status: Some Australian expats hold active Australian visas or are in the process of returning. Visa class and status at the date of transfer can affect surcharge liability in some states.

Frequently Asked Questions

References

1. Understanding foreign purchaser additional duty | State Revenue Office (www.sro.vic.gov.au)
2. Property professionals guide: Surcharge purchaser duty | Revenue NSW (www.revenue.nsw.gov.au)
3. Is your organisation eligible for a land tax foreign surcharge exemption… – Johnson Winter Slattery (jws.com.au)
4. Foreign Buyer Stamp Duty Guide Australia (2025-26) | Stamp Duty Calculator (www.stampdutycalcs.com.au)
5. The future of surcharge foreign purchaser duty and land tax in Australia – GGI (www.ggi.com)