The Government has introduced Treasury Laws Amendment (Foreign Investment) Bill 2024 on 7 February 2024. The bill clarifies that where a provision of a tax treaty, that is given the force of law under the International Tax Agreements Act 1953 (Agreements Act), is inconsistent with a Commonwealth, state or territory law that imposes tax, other than income tax (including Medicare Levy) and fringe benefits tax, that provision of the tax treaty will not operate to the extent of that inconsistency, therefore ensuring that the Commonwealth, state or territory tax continues to apply as intended.

This Bill will settle an outstanding issue with the interaction of the non-discrimination clause in certain tax treaties and the imposition of state-based foreigner surcharge purchaser duty or surcharge land tax. In February 2023, the NSW Office of State Revenue (OSR) determined that citizens of New Zealand, Finland, Germany, India, Japan, Switzerland, Norway and South Africa purchasing residential-related property or land would no longer be required to pay surcharge purchaser duty or surcharge land tax.

However, in March 2023, the State Revenue Office Victoria stated that the position in Victoria had not changed, and it would continue to apply the Victorian provisions to all foreigners.

Interestingly, the new law applies to taxes payable on or after 1 January 2018 and taxes payable in relation to tax periods that end on or after 1 January 2018 so look out for further guidance from the NSW OSR.