200-day rule: “Ordinarily resident in Australia”

For migrants, one of the most satisfying achievements is finally getting your permanent resident visa. Another is saving enough money for a deposit to buy your own property. However, accomplishing your goal of purchasing your own property may come with a fine print in the form of a surcharge purchaser duty if you’re not considered as ordinarily resident in Australia.

When buying residential property, there is a distinction between a “permanent resident” and “ordinarily resident”. You are regarded as a foreign person if you have not lived in Australia for at least 200 days in the 365 days prior to the date of the contract for purchase of the property, even if your visa grants you a permanent resident status.

For example, Michael received his permanent resident visa grant and entered Australia on 1 January 2019. That means that if he signs a contract to purchase a residential property before 21 July 2019, which is 200 days after he received the visa grant and commenced living in Australia, he will be liable to pay the surcharge purchaser duty on top of the stamp duty payable on the contract.

The surcharge purchaser duty is calculated at a rate of 8% on the value of the residential property you are purchasing.

In order to prove that you are ordinarily resident in Australia, you have to provide movement records from the Department of Home Affairs for the 12 month period before the contract date. The movement records can be requested from the Department by submitting a Form 1359. This document, along with your passport, visa grant, and signed and completed Purchaser Declaration Form have to be submitted to Revenue NSW upon its request.

At Indus Lawyers, we ensure that our clients comply with the procedural and documentary requirements imposed by the Australian authorities. If you are still unsure about your eligibility as a purchaser and what documents you need to provide, feel free to contact us at (02) 9687 8699 and one of our friendly solicitors will assist you.