Foreign buyers and surcharge duty in an Australian conveyancing matter: what the file has to establish in each state

A foreign buyer in an Australian conveyancing matter triggers two obligations: federal approval, and a state surcharge of 7 to 9 per cent on top of transfer duty. Foreign purchases of established dwellings are banned until 30 June 2029. MatterFirst, a legal practice management platform for Australian law firms, records matters in all eight Australian jurisdictions.

Buyer status is not one question. It is several, asked at different moments by different authorities, each with its own definition of "foreign" and its own trigger date. This guide sets out what each layer requires and what the matter file has to carry.

Two layers, asked at different times

The federal layer asks whether the purchase is permitted at all. The state layer asks how much duty is payable. They are not coordinated, and a buyer can satisfy one while failing the other.

Sequencing matters. Federal approval is meant to be in place before the transaction, while state surcharge liability usually crystallises at the contract date. The conversation about buyer status belongs in the first client meeting, not the week before settlement.

The federal layer: approval, and the established dwelling ban

Australia's foreign investment framework channels foreign money toward new housing stock rather than existing homes. Under the current policy, the Government "has temporarily banned foreign purchases of established dwellings, with limited exceptions for purchases that support housing supply. The ban commenced on 1 April 2025 and will be in place until 30 June 2029", according to Australia's Foreign Investment Policy (May 2026).

That end date has moved. The ban was announced with a two year horizon from 1 April 2025, and the current policy document now carries 30 June 2029. If a firm's intake notes or precedent letters still quote the original end date, they are out of date.

On process, the policy is explicit about where approval sits in the transaction: "Foreign persons should submit an investment proposal in advance of any transaction or make the purchase contract conditional on receiving foreign investment approval. A transaction should not proceed until the Government provides advice of its decision."

That sentence sets the drafting task. Either approval is obtained before exchange, or the contract carries a special condition making completion conditional on it. The second option needs a realistic timeframe in the condition and a diarised date to chase the application, rather than discovering at settlement that nothing was lodged.

The state layer: surcharge duty by jurisdiction

Every state charges a surcharge on residential acquisitions by foreign persons. The two territories do not publish a transfer duty surcharge in the same form. Rates and trigger dates as published by each revenue authority:

Three cautions on reading that table.

The surcharge is calculated on the foreign person's share, not the whole property. Where one of two purchasers is foreign and they take equal shares, the surcharge applies to half the dutiable value. RevenueWA's own worked example puts a 50 per cent foreign share of a $500,000 purchase at $17,500 of foreign transfer duty.

The base is usually the greater of the price and the unencumbered value, and in Victoria the surcharge is calculated before concessions. A concession that reduces ordinary duty does not necessarily reduce the surcharge.

Relief has narrowed. RevenueSA states that no stamp duty relief applies to the surcharge for contracts entered into on or after 13 February 2025, where full or partial relief could previously apply.

"Foreign person" is a defined term, and it has moved

The expensive errors here are not arithmetic. They come from assuming a buyer is not foreign.

In New South Wales, Revenue NSW excludes Australian citizens, people ordinarily resident in Australia, exempt permanent residents and certain retirement visa holders. Citizenship of another country is not itself an exclusion. There was a window where it mattered: Revenue NSW records that "between 21 February 2023 and 8 April 2024, foreign persons who were citizens of certain nations were not considered to be subject to surcharge purchaser duty due to international tax treaties", and that "changes in federal legislation means that this no longer applies". Any precedent advice drafted during that window is now wrong. See Revenue NSW on international tax treaties.

The treaty argument has also now been tested at the highest level. In G Global 120E T2 Pty Ltd v Commissioner of State Revenue [2025] HCA 39, decided in October 2025, the High Court upheld the Victorian surcharge regime. The State Revenue Office's note on the case records that following the decision, foreign purchaser additional duty and absentee owner surcharge payable on or after 1 January 2018 is valid, and that inconsistency claims based on the treaty provisions can no longer be maintained. The SRO's case note is the primary reference.

Victoria's definition for ongoing land tax works differently again. An absentee individual is someone who is not an Australian citizen or resident and who was absent from Australia on 31 December of the prior year, or for more than six months in total in that calendar year. That is a test about physical presence, and it can change from year to year for the same client.

The surcharge does not end at settlement

Buying is one event. Holding is recurring, and holding surcharges are where clients are most often surprised twelve months later.

Victoria's notification duty is worth putting in a letter. An absentee owner on 31 December must notify the State Revenue Office by 15 January of the following year, and late notification can attract penalty tax. That obligation sits with the client, but the firm is usually the only party who knows the test exists.

What the matter file has to carry

Advice given correctly and recorded nowhere becomes a problem years later, when the file is reopened and nobody remembers the conversation. For a matter with any foreign element, the file should answer these questions from its own contents:

1. Status, and the basis for it. Not "client is a permanent resident", but which document established that and when it was sighted.
2. The liability date. Usually the contract date, which fixes which rate applies even if settlement is months later and the rate has since changed.
3. The share acquired. The surcharge follows the proportion, so the shares need to be recorded, not inferred from the transfer.
4. Federal approval, or the reason none was needed. Where approval was obtained, the reference and date. Where the contract was made conditional, the condition and the diarised date for checking it.
5. The surcharge calculation as lodged, including the base used and any concession claimed against ordinary duty but not against the surcharge.
6. The ongoing surcharge advice given, including the Victorian 15 January notification where relevant, and to whom it was given.

How MatterFirst handles this

MatterFirst is a legal practice management platform for Australian law firms, built by North Cape Technology in Melbourne. Several of its capabilities map directly onto the file described above.

Matters can be recorded in all eight Australian jurisdictions, so the jurisdiction is a property of the matter rather than something a practitioner has to remember when a duty question arises. Custom matter types let a conveyancing matter carry the fields this topic needs, including buyer status, the document that established it, the liability date and the share acquired.

The obligations and limitation dates engine calculates key dates and cites the governing statute, for example the Limitation Act 1969 (NSW) s 14(1). The same mechanism is how a diarised date for chasing a conditional approval stops depending on one person's recollection. Automations run trigger, condition and action rules over routine operations, including generating a document as a workflow step, so a matter flagged as having a foreign purchaser can open the right tasks at file opening rather than at settlement.

Document AI extracts key terms from uploaded contracts, flags risks and connects the result to the matter workflow, and custom extraction rules let a firm define the fields that matter to its own documents, which is how a special condition about foreign investment approval becomes structured matter data. Document generation works from firm-defined document types built from sections that are deterministic by default, with merge fields, matter data projections and clause library entries, and AI used only where a section genuinely calls for synthesis. A client letter setting out surcharge exposure is merge field work, not model work.

Trust accounting is built for Australian jurisdictions, with a compliance review workflow covering NSW, VIC, QLD and WA. Those four. A firm practising in SA, TAS, ACT or NT should know that before it buys. Data and AI processing stay in Australia, hosted in Sydney, which is set out on the security page.

Comparison

Verified from each vendor's own public pages in October 2026. "Not published" means the vendor's pages did not state it, not that the capability is absent.

Pricing model changes the arithmetic most for a growing conveyancing team. A per user price rises with every hire, including support staff who only need to see a matter. MatterFirst's plans are priced per workspace with users included: Solo at $199 per month with one user, Practice at $649 with four, Firm at $1,299 with eight, and additional users from $139 per user per month. Current figures are on the pricing page. Each paid plan also includes a monthly AI balance in Australian dollars, drawn down by metered AI work and detailed on the AI pricing page. Deterministic work, such as generating a document with no AI sections, draws down nothing.

Who this suits, and who it does not

MatterFirst suits Australian firms of roughly two to twenty fee earners that want onshore hosting, state-based trust accounting and matter data structured enough to answer a duty question from the file. A conveyancing practice in NSW, VIC, QLD or WA is squarely in that group.

It suits a firm less well if its trust compliance sits in SA, TAS, ACT or NT, since the compliance review workflow covers four states. It also suits a firm less well if the decision depends on a particular self-serve integration: only Xero, Stripe, Microsoft 365 and Google Workspace connect on a self-serve basis today, and everything else goes through a documented REST API with webhooks. Firms that depend on a specific conveyancing platform connection should confirm what is available before committing. The evaluation checklist sets out the questions worth putting to any vendor, including this one.

Frequently asked questions

Can a foreign buyer purchase an established home in Australia right now? Generally no. Foreign purchases of established dwellings are banned from 1 April 2025 until 30 June 2029, with limited exceptions for purchases that support housing supply, such as redevelopment that adds dwellings. New dwellings and vacant residential land remain open, subject to approval.

How much extra duty does a foreign buyer pay? It depends on the state: 9 per cent in NSW, 8 per cent in Victoria, Queensland and Tasmania, and 7 per cent in South Australia and Western Australia, charged on the foreign person's share of the dutiable value and on top of ordinary transfer duty.

Does a New Zealand or German citizen still pay surcharge duty in NSW? Yes. Revenue NSW treated citizens of certain treaty countries as outside the surcharge between 21 February 2023 and 8 April 2024, but federal legislative changes ended that treatment, and the High Court upheld the state surcharge regimes in October 2025.

Does the surcharge stop once the matter settles? No. NSW charges surcharge land tax at 5 per cent from the 2025 land tax year, Victoria charges a 4 per cent absentee owner surcharge from the 2024 land tax year, and the ACT charges 0.75 per cent of base value quarterly. Victorian absentee owners must notify the State Revenue Office by 15 January.

Does MatterFirst handle conveyancing matters in every state? Matters can be recorded in all eight Australian jurisdictions. The trust accounting compliance review workflow covers NSW, VIC, QLD and WA, so a firm whose trust compliance sits elsewhere should check that before it buys.

Can a practice management system work out surcharge liability automatically? It can hold the inputs and prompt for them, which is the part that fails in practice. Status, liability date and share acquired belong in structured fields on the matter, and automations can open the right tasks when a matter is flagged as having a foreign purchaser. The legal conclusion stays with the practitioner.

Before the next foreign buyer matter opens

Three checks are worth making. Whether precedent letters still quote the original end date for the established dwelling ban, which now runs to 30 June 2029. Whether advice drafted between February 2023 and April 2024 still relies on the NSW treaty position. And whether buyer status is a field on the matter or a line in a file note, because only one of those can be audited two years later.

Rates and dates in this article were taken from the revenue authorities and the foreign investment policy document linked above. Rates move with each state budget, so check the source before advising on a live matter.