Stamp Duty and Tax Rules for New Zealand Citizens Buying Property in Victoria

 
 

For many years, New Zealand citizens purchasing property in Victoria were treated much the same as Australian permanent residents for duty purposes. That position has changed. Under the current Victorian rules, New Zealand citizens can now be treated as foreign purchasers unless they meet specific residency requirements.

This means that buying a property in Victoria as an NZ citizen may now trigger foreign purchaser additional duty, foreign owner land tax surcharges, and separate federal FIRB obligations, depending on your circumstances.

1. When New Zealand citizens are treated as foreign purchasers in Victoria

The Duties Act 2000 (Vic) sets the definitions for who is and is not a foreign purchaser. New Zealand citizens are not automatically exempt from foreign purchaser duty. Instead, Victoria now looks at whether the buyer holds a Special Category Visa (SCV Subclass 444) and whether the NZ citizen is ordinarily resident in Australia at the time of entering the contract.

To avoid being classified as a foreign purchaser, an NZ citizen must:

  • Hold an SCV on the day they sign the contract and on the day of settlement, and

  • Have been living in Australia for a period that satisfies the “ordinarily resident” test.

If either of these points is not met, an NZ citizen falls into the foreign purchaser category, meaning the Victorian foreign purchaser additional duty may apply. This position is assessed by the State Revenue Office when the duties forms are completed.

2. What foreign purchaser additional duty means for NZ buyers

If you are classified as a foreign purchaser, Victoria charges foreign purchaser additional duty under the Duties Act 2000 (Vic). This is added to standard stamp duty and is calculated as a percentage of the price paid for the property.

This surcharge applies mainly to residential land or land intended to become residential. It is assessed as part of the Digital Duties Form process and must be paid at settlement.

3. Land tax and the NZ position under Victorian law

Land tax in Victoria is administered under the Land Tax Act 2005 (Vic). New Zealand citizens who do not meet the “ordinarily resident” requirements may also be treated as foreign owners for land tax purposes.

If so, the Victorian foreign owner land tax surcharge can apply each year the property is held.

This is important for NZ citizens intending to buy investment property in Melbourne or regional Victoria, as the annual surcharge can materially increase holding costs over time.

4. Residential Land Acquisition Statement requirements

Every purchaser of residential property in Victoria must complete a Residential Land Acquisition Statement. For NZ citizens this form is critical because it determines:

  • Whether you hold an SCV

  • Whether you are ordinarily resident in Australia

  • Whether foreign purchaser additional duty applies

Your status is assessed individually and also in combination with any co-purchasers. If you buy jointly with an Australian citizen partner, your own status still matters and may still result in a surcharge.

5. FIRB obligations for New Zealand citizens

The federal Foreign Acquisitions and Takeovers Act 1975 (Cth) is separate from Victorian duty law.

Under Commonwealth rules, New Zealand citizens generally do not require FIRB approval to purchase existing residential property in Australia. This is a long-standing exemption that has not changed.

However:

  • NZ citizens buying through a trust or company may face different outcomes

  • Mixed-ownership situations must be checked

  • FIRB penalties still apply if a transaction falls into a category that does require approval.

6. Vacancy fees and NZ buyers

NZ citizens who are non-residents for federal purposes may still fall under the ATO’s vacancy fee regime.

This applies if:

  • You are considered a foreign person under Commonwealth law, and

  • The property is left unoccupied or not genuinely rented for at least 183 days in a 12-month period.

The fee is generally based on the FIRB application fee for that property type. If FIRB approval was not required, the vacancy fee still may apply depending on how the foreign-person definition interacts with the ownership structure.

7. Common NZ buyer scenarios

Here are situations that come up frequently for New Zealand purchasers:

NZ citizen living in New Zealand and buying investment property in Victoria
Generally treated as a foreign purchaser for Victorian duty and land tax. The Victorian surcharge may apply in full. FIRB approval may not be required, but the vacancy fee regime still needs to be checked.

NZ citizen newly arrived in Australia and renting in Melbourne
You may still be treated as foreign until you satisfy the “ordinarily resident’’ test. Timing matters. A short period of residence is usually not enough to avoid the foreign purchaser definition when the SRO reviews your Acquisition Statement.

NZ citizen partner buying jointly with Australian spouse
The foreign purchaser surcharge may still apply to your share unless the criteria for exemption are clearly met. This must be checked before signing a contract to avoid an unexpected duty bill at settlement.

NZ citizen holding property through a trust or company
The SRO will look through to the underlying interest holders. If you are treated as a foreign person for Victorian law, the trust or company may also be treated as foreign.

8. Practical steps for New Zealand citizens before signing a contract

  • Check whether you hold an SCV and whether you are considered ordinarily resident in Australia.

  • Budget for the foreign purchaser additional duty unless you are confident you fall within the resident exemption.

  • Factor in the foreign owner land tax surcharge if buying an investment property.

  • Confirm whether your ownership structure changes your status.

  • Check whether the federal vacancy fee rules apply to you.

  • Make sure the contract is reviewed before signing so any FIRB or residency matters are handled properly.

9. How Victorian Property Settlements can help NZ buyers

As explained by David Dawn, Licensed Conveyancer at Victorian Property Settlements, the new Victorian rules have created a real trap for NZ citizens who assume they are treated the same as Australians. The reality is that Victoria now applies a detailed residency test, and getting it wrong can lead to a significant and unexpected duty bill.

We can help you:

  • Work out whether you are a foreign purchaser under the Duties Act 2000 (Vic)

  • Check your residency status for Victorian land tax

  • Structure the contract correctly for your situation

  • Prepare all State Revenue Office forms and guide you through settlement.

If you are a New Zealand citizen planning to buy property in Victoria, you can contact Victorian Property Settlements on 03 9783 0111 or visit www.victorianpropertysettlements.com.au.