High court position clear: foreign stamp duty and land tax surcharges valid

G Global 120E T2 Pty Ltd v Commissioner of State Revenue [2025] HCA 39 (G Global).

It is not often that state tax matters make it to the High Court of Australia (the High Court). It is even less frequent that the very validity of those taxes are at the heart of the dispute.

The problem arose from an inconsistency between state tax law and Australia’s international tax treaties. Although this inconsistency had already been addressed via an amendment, the question at the heart of the G Global case was whether the amendment was effective and could apply retroactively. 

The answer delivered by the High Court on 15 October 2025 was a resounding yes.

    Background:     

The decision in G Global presents a clear and unambiguous position of the High Court that foreign stamp duty and land tax surcharges are valid and can continue to be imposed by state and territory governments. However, it is worth revisiting the somewhat tortuous path governments have had to tread to get to this end point. 

Treaties with Germany and New Zealand 

Germany and New Zealand (NZ) both have bilateral treaties (Treaties) with Australia that are given legal effect by section 5(1) of the International Tax Agreements Act 1953 (Cth) (ITAA). 

The Treaties contain non-discrimination clauses that prohibit the imposition of “any taxation or any requirement connected therewith which is other or more burdensome” than those to which nationals or similar entities of Australia are subjected, on nationals of, or entities controlled by, residents of Germany and NZ (Non-discrimination Clauses). The Non-discrimination Clauses applied to “taxes of every kind and description.” 

State taxes targeting foreign landowners 

The Land Tax Act 2010 (QLD) (Queensland Land Tax Act) imposes a surcharge on foreign owners [1], and the Land Tax Act 2005 (VIC) (Victorian Land Tax Act) imposes a surcharge on absentee owners, [2] along with additional reporting requirements. 

[1] At a rate of 3% on the taxable value of land over $350,000.
[2] At a rate of 4% on the taxable value of land over the relevant threshold.

These taxes are inconsistent with the ITAA and deemed inoperative prior to Amendment. 

ITAA Amendment 

On 8 April 2024, section 5(3) was inserted into the ITAA (the Amendment). That subsection states: 

“The operation of a provision of an agreement provided for by subsection 5(1) of the ITAA is subject to anything inconsistent with the provision contained in a law of the Commonwealth, or of a State or Territory, that imposes a tax other than Australian tax, unless expressly provided otherwise in that law.” 

The Amendment confined the effect of the Non-discrimination Clauses to “Australian tax”, which is defined as income tax and fringe benefits tax (FBT). 

This Amendment resolves the inconsistencies between the land tax surcharges imposed by the Queensland Land Tax Act and the Victorian Land Tax Act and the ITAA. 

Takeaway for foreign landowners: Surcharges are valid and must be paid 

The effect of the decision in G Global is that the surcharges imposed by the Queensland Land Tax Act and the Victorian Land Tax Act (that were previously held as inoperative) are revived and payable. The High Court confirmed that the Amendment effectively excluded the operation of the Treaties upon other taxes imposed by the Commonwealth, or the States or Territories, and did so retroactively in relation to taxes payable on or after 1 January 2018. 

G Global provides authoritative support for the ongoing application of surcharge land tax regimes across Australian jurisdictions and confirms that the imposition of surcharges on foreign entities is not inconsistent with Australia’s obligations under international tax treaties. 

Further, this judgement also confirms that any surcharge tax rates or additional tax obligations that may be imposed on foreign persons (such as surcharge stamp duty) are valid. 

Point of difference: NSW pre-Amendment surcharge refunds 

When examining the history of this case, there is an interesting point of difference between the states approach to collecting these surcharges. Prior to the Amendment, Revenue NSW was first alerted to the incompatibility of foreign surcharges (regarded as a tax) with the ITAA around July 2022 upon receipt of a foreign surcharge purchaser duty objection. 

Revenue NSW effectively accepted the position that, due to international tax agreements entered into by the Australian Government, citizens of NZ, South Africa, Germany, Finland, Japan, Norway, India and Switzerland were exempt from paying the surcharge land tax. 

On this basis, Revenue NSW issued refunds to purchasers/transferees and landowners from the eight nations concerned who paid surcharge purchaser duty or surcharge land tax on or after 1 January 2021. In effect, refunds of the 2021 land tax surcharge were available to affected landowners, but this required them to actively apply for the refund. 

In stark contrast, other revenue authorities such as the Queensland Revenue Office (QRO) and Victorian State Revenue Office (VSRO) rejected the position being taken by Revenue NSW. The VSRO made an announcement to the effect that it was aware of the position being taken by Revenue NSW, but that it would not follow suit in relation to the Victorian absentee owner surcharge. Both states continued to impose (and collect) their respective foreign/ absentee owner surcharges. 

However, once the Amendment became law, Revenue NSW started collecting the foreign surcharge again and did not issue any further refunds. 

Windfall tax provisions in Queensland 

The Queensland Government took an opposite approach to NSW in response to the uncertainty around foreign surcharges prior to the Amendment. As part of the 2025-26 budget (delivered 24 June 2025), the Queensland Government announced the introduction of ‘windfall taxes.’ These taxes were designed to safeguard against refund claims of foreign surcharge liabilities, should the surcharges eventually be found constitutionally invalid. 

The windfall taxes were legislated through amendments to the Duties Act 2001 (Qld) and Queensland Land Tax through the Revenue and Other Legislation Amendment Bill 2025 (Qld). Effectively, the amendments established a windfall duty and windfall land tax which would apply if the foreign surcharge provisions were held to be constitutionally invalid. 

With G Global now effectively ruling the surcharges valid, it remains to be seen how the Queensland windfall tax provisions will be treated going forward.

FOR MORE INFORMATION

If you require any advice regarding compliance with these obligations, or advice on surcharge land taxes more generally, please reach out to a member of our indirect tax team.