Foreign Buyer Surcharges 2026-27: State by State, and What They Do to a Loan Quote
Foreign purchasers of Australian residential property face a state-based surcharge that adds directly to the funds-to-complete on settlement, on top of the standard transfer duty. In 2026-27, NSW applies a 9% surcharge, Victoria 8%, Queensland 8%, Western Australia 7%, South Australia 7%, and Tasmania 8%. The ACT and the Northern Territory impose no foreign purchaser conveyance-duty surcharge at all. For a $900,000 established home in NSW, that 9% surcharge alone adds $81,000 to the upfront cash requirement, which must be funded from genuine savings because most Australian lenders cap the loan-to-value ratio (LVR) for non-resident borrowers at 70–80% and exclude the surcharge from the loanable amount. On top of the surcharge, non-resident and working-holiday-maker tax scales compress net income and reduce assessed borrowing capacity under APRA’s 3% serviceability buffer, which remains in force as at July 2026. The result is a double squeeze: a larger cash-to-complete and a smaller maximum loan. This article sets out the 2026-27 surcharge rates jurisdiction by jurisdiction, the non-resident and WHM tax scales, and how each interacts with a loan quote.
What Is a Foreign Buyer Surcharge and When Does It Apply?
A foreign buyer surcharge—also called foreign purchaser additional duty or foreign investor duty surcharge—is an extra percentage levied on top of the standard transfer (stamp) duty when residential property is acquired by a person or entity classified as a foreign purchaser under state legislation. Each state defines “foreign” slightly differently, but the core test generally captures individuals who are not Australian citizens, not permanent residents, or not New Zealand citizens holding a special-category visa, as well as foreign corporations and trusts.
The surcharge is calculated on the dutiable value of the property—usually the purchase price or market value, whichever is higher—and is payable at settlement. It is not a tax that can be capitalised into the loan in most cases; mainstream Australian lenders treat it as a borrower’s own funds requirement, meaning the buyer must have the cash available before settlement. That requirement directly increases the funds-to-complete line on a loan quote and reduces the effective deposit available to meet LVR thresholds.
State-by-State Foreign Buyer Surcharge Rates for 2026-27
New South Wales — 9% Surcharge
NSW applies a 9% foreign purchaser surcharge on residential-related property. The surcharge sits on top of the standard transfer duty scale, which for 2026-27 runs from 1.25% on dutiable values up to $18,000 through to a premium residential rate of 7% on values above $3,870,000. For a $1,200,000 established home in Sydney, standard duty is approximately $48,187 under the $387,001–$1,290,000 bracket, and the 9% surcharge adds $108,000, lifting total stamp-duty cost to roughly $156,187. A non-resident buyer borrowing at a 70% LVR would need to bring about $468,000 in cash—the 30% deposit plus the full surcharge—before other costs.
Victoria — 8% Surcharge
Victoria imposes an 8% foreign purchaser additional duty on residential land. The standard duty scale in 2026-27 is unchanged: a flat 5.5% on dutiable values between $960,001 and $2,000,000, and 6.5% above $2,000,000. On a $1,500,000 Melbourne property, standard duty is $110,000 plus 6.5% of the amount above $2,000,000—but because the value falls in the $960,001–$2,000,000 band, duty is a flat 5.5%, or $82,500. The 8% surcharge adds $120,000, so total duty is $202,500. With a 70% LVR, the cash-to-complete requirement climbs to roughly $652,500—the 30% deposit plus the combined duty.
Queensland — 8% AFAD
Queensland’s Additional Foreign Acquirer Duty (AFAD) is 8%. Standard duty on a $900,000 Brisbane property falls in the $540,000–$1,000,000 bracket: $17,325 plus 4.5% of the excess over $540,000, which works out to $17,325 + $16,200 = $33,525. The 8% surcharge adds $72,000, bringing total duty to $105,525. A non-resident buyer with a 75% LVR would need $225,000 deposit plus $105,525 duty—$330,525 in cash before settlement.
Western Australia — 7% Surcharge
WA’s foreign buyer surcharge is 7%. Standard duty on a $600,000 Perth home falls in the $360,001–$725,000 bracket: $11,115 plus 4.75% of the excess over $360,000, which is $11,115 + $11,400 = $22,515. The 7% surcharge adds $42,000, for total duty of $64,515. At 80% LVR—the higher end for some non-resident lending niches—the deposit is $120,000 and total cash-to-complete is $184,515.
South Australia — 7% Surcharge
South Australia applies a 7% foreign surcharge on residential land. Standard duty on a $700,000 Adelaide property sits in the $500,000+ bracket: $21,330 plus 5.5% of the excess over $500,000, giving $21,330 + $11,000 = $32,330. The 7% surcharge adds $49,000, lifting total duty to $81,330. At 70% LVR, the cash requirement is $210,000 deposit plus $81,330 duty—$291,330.
Tasmania — 8% FIDS
Tasmania’s Foreign Investor Duty Surcharge (FIDS) is 8% on residential property. Standard duty on a $500,000 Hobart property in the $375,000–$725,000 bracket is $12,935 plus 4.25% of the excess over $375,000: $12,935 + $5,312.50 = $18,247.50. The 8% surcharge adds $40,000, for total duty of $58,247.50. At 70% LVR, cash-to-complete is $150,000 deposit plus $58,247.50 duty—$208,247.50.
Australian Capital Territory — No Surcharge
The ACT imposes no foreign purchaser conveyance-duty surcharge. Its foreign surcharge is confined to land tax at 0.75% per annum on the unimproved value of residential land owned by a foreign person. For a non-resident buyer purchasing a $1,000,000 apartment in Canberra, the only duty payable is the standard owner-occupier concessional rate, which is significantly lower than the investor scale. This makes the ACT a materially cheaper entry point for a foreign buyer from a funds-to-complete perspective, though the ongoing annual land tax surcharge must be factored into post-settlement cash flow.
Northern Territory — No Surcharge
The Northern Territory likewise has no foreign purchaser conveyance-duty surcharge. Standard NT duty is calculated under a formula for values up to $525,000—D = (0.06571441 × V²) + 15V, where V is the dutiable value divided by 1,000—and tiered rates around 4.95% to 5.95% above $525,000. With no surcharge, the funds-to-complete for a non-resident buyer in Darwin is materially lower than in the southern states, though lender appetite for NT security postcodes can be narrower, which may affect LVR caps and loan availability regardless of the tax position.
Non-Resident and Working-Holiday-Maker Tax Scales for 2026-27
A foreign buyer’s loan quote is shaped not only by the upfront surcharge but also by the income tax rate applied to their Australian earnings, because lenders assess serviceability on after-tax income. Non-residents and working holiday makers face different tax scales from Australian residents, and neither group benefits from the tax-free threshold or the 15% resident bracket that took effect on 1 July 2026.
Non-Resident Tax Rates
Australian foreign residents in 2026-27 are taxed at 30% on the first $135,000 of income, then 37% on income between $135,001 and $190,000, and 45% on income above $190,000. There is no tax-free threshold, no access to the 15% bracket, and no Medicare Levy. For a non-resident earning $120,000 in Australian-sourced income, the tax liability is $36,000—compared with roughly $24,187 for a resident on the same gross income under the 2026-27 resident scale (including the 2% Medicare Levy). That difference of nearly $12,000 in after-tax income flows directly into the lender’s serviceability calculator and reduces the maximum loan amount.
Working Holiday Maker Tax Rates
Working holiday makers on 417 or 462 visas are taxed at 15% on the first $45,000, then 30% on income between $45,001 and $135,000, 37% on $135,001 to $190,000, and 45% above $190,000. A WHM earning $80,000 pays $6,750 on the first $45,000 plus 30% on the next $35,000, for a total of $17,250. That is higher than the resident tax on the same income—roughly $14,092 including Medicare Levy—but lower than the non-resident tax of $24,000. The WHM scale therefore produces a borrowing capacity somewhere between the resident and non-resident outcomes, though many lenders apply further restrictions to WHM applicants, including shorter loan terms, lower maximum LVRs, and requirements for a larger deposit sourced from outside Australia.
For a deeper look at how the resident tax cuts affect borrowing power, see our treatment of the 15% bracket reduction in Australian Income Tax 2026-27: What the 15% Bracket Cut Does to Your Loan Size. Non-residents and WHMs do not benefit from that cut, which widens the serviceability gap between resident and non-resident applicants.
How the Surcharge and Tax Scales Hit a Loan Quote
A loan quote for a non-resident buyer has three pressure points that are larger than for a resident buyer: the funds-to-complete, the maximum LVR, and the assessed borrowing capacity.
Funds-to-complete is the total cash the buyer must produce at settlement. It includes the deposit (the gap between the purchase price and the loan amount), the standard transfer duty, the foreign buyer surcharge, and other costs such as legal fees and mortgage registration. Because the surcharge is a percentage of the dutiable value and sits outside the loan, it can add tens of thousands of dollars to the cash requirement. On a $1,000,000 purchase in a state with an 8% surcharge, the surcharge alone is $80,000—equivalent to an extra 8 percentage points of deposit.
Maximum LVR for non-resident borrowers is typically capped at 70–80% by Australian lenders, and some lenders apply a lower cap—or decline entirely—for certain visa types, foreign-income-only applicants, or properties in higher-risk postcodes. A 70% LVR on a $1,000,000 purchase means a $300,000 deposit. Add standard duty of roughly $40,000–$55,000 and an $80,000 surcharge, and the total cash-to-complete reaches $420,000–$435,000 before other costs. That is a substantial hurdle even for a well-qualified borrower.
Borrowing capacity is assessed using APRA’s 3% serviceability buffer, which remains in force as at July 2026. The lender tests the applicant’s ability to repay the loan at the product rate plus 3 percentage points, which compresses the maximum loan amount. For non-residents and WHMs, the higher tax rates reduce after-tax income, and the buffer applies to that smaller net figure, producing a lower assessed borrowing capacity than for a resident on the same gross income. From February 2026, APRA also requires banks to keep new lending at a debt-to-income ratio of 6 or above within 20% of new lending per portfolio, which can further constrain a high-DTI non-resident application. The mechanics of the buffer and the DTI cap are explained in detail in Borrowing Power 2026: How APRA’s 3% Buffer and the DTI Cap Set Your Loan Ceiling.
Medicare Levy and MLS: Why They Matter for Resident Co-Borrowers
A non-resident borrower does not pay the Medicare Levy, but if the loan application includes an Australian-resident co-borrower—a common structure when one partner is a citizen or permanent resident—the resident’s income is subject to the 2% Medicare Levy and potentially the Medicare Levy Surcharge if they do not hold eligible private hospital cover and earn above the MLS threshold. For 2025-26, the MLS singles threshold is $101,000, with tiers of 1.0%, 1.25% and 1.5% applying at higher incomes. Those extra percentage points reduce the resident co-borrower’s after-tax income and therefore the combined serviceability outcome. The interaction is unpacked in Medicare Levy and MLS 2026-27: The Quiet Drag on Your Borrowing Power.
Jurisdictions Without a Surcharge: ACT and NT in Focus
The ACT and NT are the only Australian jurisdictions with no foreign purchaser conveyance-duty surcharge in 2026-27. That does not mean foreign buyers face no additional costs—the ACT’s 0.75% annual land tax surcharge on foreign owners is an ongoing liability, and the NT’s stamp duty rates are not especially low—but the upfront cash-to-complete is materially smaller. For a foreign buyer comparing a $800,000 purchase in Canberra against an equivalent in Sydney, the absence of a 9% surcharge saves $72,000 at settlement. That saving can be redirected into the deposit, potentially lifting the effective LVR or reducing the total cash requirement. However, lender policy on ACT and NT properties varies: some lenders apply lower maximum LVRs or require higher postcodes in those territories, and a licensed Arrivau mortgage adviser can identify which lenders are currently accepting non-resident applications for those locations.
Data Basis and Sources
All figures in this article are drawn from the verified facts block sourced from the Australian Taxation Office, state and territory revenue offices, and APRA, as at July 2026. The surcharge rates and standard duty scales reflect the legislated position for the 2026-27 financial year. Tax scales for residents, non-residents, and working holiday makers are the ATO rates effective from 1 July 2026. The APRA serviceability buffer of 3% was confirmed as still in force in May 2026, and the DTI portfolio cap has applied since February 2026. Where a state revenue office has published CPI-indexed thresholds for 2026-27, those thresholds are used; where a state has not changed its scale, the continuing rates are noted. LVR caps and lender policies described here represent common market practice and are not specific to any single lender. Readers should treat this article as a policy explainer, not a loan offer or tax advice.
FAQ
Do foreign buyers pay the surcharge on top of standard stamp duty? Yes. The foreign buyer surcharge is an additional duty levied on the dutiable value of the residential property and is payable on top of the standard transfer duty. It is not a substitute for standard duty.
Can I borrow the surcharge amount as part of my home loan? Generally no. Most Australian lenders treat the surcharge as a borrower’s own funds requirement and exclude it from the loanable amount. The surcharge must be funded from genuine savings, which increases the cash-to-complete.
Which states have no foreign buyer surcharge in 2026-27? The Australian Capital Territory and the Northern Territory impose no foreign purchaser conveyance-duty surcharge. The ACT does apply a 0.75% annual land tax surcharge on foreign owners, but that is a post-settlement cost, not an upfront duty.
Do non-residents get the 15% tax bracket that residents receive from July 2026? No. Non-residents are taxed at 30% from the first dollar of Australian-sourced income, with no tax-free threshold and no access to the 15% bracket. Working holiday makers have their own scale starting at 15% on the first $45,000, but they also do not receive the resident 15% bracket.
How does the surcharge affect my borrowing capacity? The surcharge does not directly reduce the loan amount a lender will offer, but it increases the cash you need at settlement. Because non-resident LVRs are typically capped at 70–80%, a larger cash requirement can mean you need to buy at a lower price point to keep the deposit and duty within your available savings. Separately, non-resident and WHM tax scales reduce after-tax income, which lowers assessed borrowing capacity under APRA’s 3% serviceability buffer.
Where to Go From Here
Policy settings tell you the size of the cheque you need at settlement; they do not tell you whether the loan behind it actually works. If you want the duty, deposit, LMI and assessed repayment modelled together against your real income and commitments, a licensed Arrivau mortgage adviser can review your position and come back to you within one business day.
This article is general information only and does not constitute financial, tax or legal advice. Rates, thresholds and eligibility rules change. Confirm your own position with the ATO, the relevant state or territory Revenue Office, or a licensed adviser before acting.