Buying Property in Australia as a Mixed-Status Couple

Can one partner be a citizen and the other a foreign buyer? Here's how surcharges and approvals apply when couples co-own property in Australia.

When one partner is an Australian citizen or permanent resident and the other is considered a foreign person, it can be confusing to understand how property rules apply.

Who Counts as a "Foreign Person"?

The ATO defines a foreign person as anyone who is not an Australian citizen, not a permanent resident, and not a New Zealand citizen with a special category visa. Some companies and trusts where foreign persons hold substantial interests also count.

Joint Ownership: How Surcharges Apply

When a property is purchased jointly, state and territory revenue offices apply foreign purchaser surcharges only to the foreign person's share.

• In Victoria, if one partner is a foreign purchaser, the Foreign Purchaser Additional Duty (FPAD) of 8% applies to that partner's interest only.
• In New South Wales, the surcharge purchaser duty and surcharge land tax apply to the foreign owner's share only.

Trusts and Companies: Important Trap

If property is purchased through a trust or company, the foreign person tests apply differently. A trust where a foreign person has a substantial interest may be treated as a foreign trust even if other beneficiaries are citizens or permanent residents. Professional advice is essential for these structures.

Key Takeaways

• Only the foreign person's share attracts surcharges.
• Married or de-facto status does not exempt the foreign partner from being assessed.
• Trusts and companies require extra caution — professional advice is essential.

If you and your partner are planning a purchase, speak with your state revenue office and check the ATO foreign investment pages before signing a contract.