In Victoria, foreign purchaser additional duty (FPAD) is an 8% extra duty on residential properties for foreign purchasers. From 26 November 2025, the FPAD rules for New Zealand citizens changed from a visa requirement to a residency requirement. If you are a New Zealand citizen, this may change whether you are required to pay FPAD.
What is a foreign purchaser?
You are a foreign purchaser if you are:
a. A foreign natural person;
b. A foreign corporation; or
c. A trustee of a foreign trust.
You are a foreign natural person if you:
a. Are not an Australian citizen;
b. Do not hold an Australian permanent residence visa; or
c. You are a New Zealand citizen who does not meet the residency requirement.
Previous criteria for New Zealand citizens
Prior to 26 November 2025, you were not required to pay FPAD if you were:
a. A New Zealand citizen holding a Special Category Visa (Subclass 444); and
b. You were not an Australian citizen or permanent Australian resident.
A Special Category Visa (Subclass 444) is automatically issued to a New Zealand passport holder upon arrival in Australia. A New Zealand citizen must be physically present in Australia to hold a Special Category Visa (Subclass 444). This means if you were not present in Australia on the date you acquired the property (the date of settlement), then you will be considered as a foreign purchaser and required to pay FPAD.
Current criteria for New Zealand citizens (Residency Requirement)
From 26 November 2025, a residency requirement has replaced the Subclass 444 requirement. New Zealand citizens will not be treated as foreign purchasers or required to pay FPAD if:
a. You have or will ordinarily reside in Australia; and
b. Do so for at least 6 consecutive months within a period commencing 12 months before and ending 12 months after the date of settlement.
This residency requirement is applicable to all contracts that settle on or after 26 November 2025. This includes contracts that have been entered into before 26 November 2025, but settlement has occurred on or after this date.
What does ‘ordinarily reside’ mean?
This is when you regularly or customarily live in Australia and does not include temporary or occasional residence.
More information on confirming your foreign purchaser status can be found here.
What if you meet the current criteria but your circumstances change?
If you purchase a property in Victoria with the expectation that you meet the residency requirement, but your circumstances change and no longer meet the requirement. You must notify the State Revenue Office (SRO) Commissioner in writing within 30 days after becoming aware of any circumstances that may result in the residency requirement not being met.
If you do not comply with the residency requirement then you will be considered a foreign purchaser, and the SRO may reassess the applicable duty and FPAD can apply to the relevant property.
If the SRO Commissioner is satisfied that there is ‘good reason’ that you cannot meet the residency requirement, then they have the discretion to reduce or extend the residency period duration.
What is a ‘good reason’?
Generally, the circumstances must have not been known to you at the time of the transfer and be outside of your control.
Need Help?
If you are wanting to purchase a residential property in Victoria and you are not sure if you meet the residency requirement for New Zealand citizens, contact our property conveyancing lawyers in Melbourne at hello@wlegalgroup.com.au or call any of our Australian phone numbers.
