New Zealanders who purchased property in Queensland before 8 April 2024 may be in line for significant refunds on stamp duty and land tax surcharges they paid. These surcharges, which the Queensland State Government was not entitled to charge, could result in thousands of dollars of refunds per property for New Zealand citizens.

A class action, known as the Foreign Purchasers Surcharges Class Action, is being explored against the Queensland State Government for incorrectly applying these surcharges to property purchasers from certain countries, including New Zealand. This follows a similar claim already commenced against the Victorian State Government.

The legal claim, which will be filed by Australian commercial law firm Johnson Winter Slattery, will seek repayment of two key surcharges:

1. Additional foreign acquirer duty (AFAD) - an additional 7% stamp duty charged on the purchase price of the property and payable by foreign nationals; and
2. Land Tax Surcharge (LTS) – an additional 2% land tax charged on the value of the property above a certain threshold and payable by foreign nationals.

Commenting on the proposed class action, John Walker from litigation funder CASL said, “With the average property price in Queensland exceeding AU$885,400, affected New Zealand-based purchasers could be entitled to substantial refunds if the legal case is successful.

“Taking the average property price and only applying AFAD, a purchaser could be eligible for a refund exceeding AU$57,000.  

“We’re encouraging any property purchasers who are based in New Zealand and who believe they might be entitled to a refund to register their interest with the Foreign Purchasers Surcharges Class Action.”

Walker explains that the basis of the claim lies in the non-discrimination clause included in eight double tax agreements, including the agreement between Australia and New Zealand. “This clause, which applies to all taxes, stipulates that New Zealanders purchasing residential property in Australia should not be subject to taxes or surcharges applicable to foreign buyers.

 “Despite this clause, Queensland and other states such as Victoria, NSW, and Tasmania have been applying AFAD and LTS to properties purchased by New Zealanders. This practice is believed to be inconsistent with federal law, which, according to Section 109 of the Australian Constitution, should prevail over state law in cases of inconsistency.

“While new federal legislation has been introduced to address this inconsistency, the claim asserts that it cannot be applied retrospectively. As a result, New Zealanders who acquired property in Queensland before 8 April 2024 could be eligible for a refund of the incorrectly applied AFAD and LTS amounts.

For more information or to register interest, please visit https://www.fpsclassaction.com.au/

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