Six months in India can turn a permanent resident into a foreign person for tax

A wedding in January. A death in the family in March that nobody planned for. A father who cannot be left on his own in April, then May, then June. By the time the family lands back at Sydney Airport in July, they have been out of Australia for close to half the year, and a line they never knew existed is behind them. Under the surcharge land tax NSW levies on foreign persons, a permanent resident who lives overseas for 165 days or more in a calendar year is considered a foreign person. There is no floor below which the charge stops.

Revenue NSW sets this out on its own page, last updated on 8 April 2026. A permanent resident is treated as a foreign person unless they have lived in Australia for 200 days or more within a calendar year. The page adds that the 200 days need not be consecutive, which helps a household travelling in short bursts. It then states the flip side without softening it. Live overseas for 165 days or more in a calendar year, or 166 days or more in a leap year, and you are a foreign person.

How surcharge land tax NSW counts your days

The arithmetic fits on the back of a boarding pass. A calendar year holds 365 days. Take away the 200 days in Australia that keep a permanent resident outside the foreign person category and 165 are left. That is five months and a fortnight. One long trip will do it. So will a run of shorter ones, because the count runs across the calendar year rather than any single absence, and a trip straddling New Year is split between two of them.

The rate is 5 per cent of land value from the 2025 tax year onward. It was 4 per cent in 2023 and 2024, and 2 per cent from 2018 to 2022. There is no tax free threshold, and the Revenue NSW page on surcharge land tax says so in terms: “A tax-free threshold does not apply to surcharge land tax. You must pay surcharge land tax regardless of the land value of your property.”

Purely as an illustration, and not a figure drawn from any Sydney suburb or any published median, take a block with a land value of $800,000. Five per cent of $800,000 is $40,000, the surcharge for one year, sitting on top of whatever ordinary land tax is already payable.

The home you live in is not automatically out of reach

The surcharge land tax NSW applies to foreign persons reaches the house they live in, not only an investment property, unless the intended principal place of residence exemption is claimed. That exemption is a harder test than the general one, requiring 200 continuous days physically in Australia in the calendar year. Continuous is the word doing the work, because days added up across several trips will not satisfy it. It must be applied for by 31 March, or by the due date on the assessment, whichever comes first. Revenue NSW last updated that page on 28 November 2025.

So 200 appears in both tests and is counted differently in each. For the general test, the agency says plainly that the days need not be consecutive. For the exemption, they must. A household reading quickly can carry the reassurance of the first rule across to a rule that will not bear it.

A second tax sits on the purchase itself

Surcharge purchaser duty is a separate charge and it stacks. A permanent resident escapes it only by being ordinarily resident in Australia, which for duty turns on 200 days in Australia within the 12 months before the liability date (generally the contract date), or by living in the purchased home as a principal place of residence for 200 continuous days within 12 months of that date. That 12 month window sits differently to the calendar year count used for surcharge land tax. Revenue NSW last updated the two pages covering it on 25 June 2026 and 27 May 2026. A family buying a first home in Schofields or Leppington after a long stretch in India can meet both charges in one year, one on the purchase and one on the holding.

Ordinary land tax runs alongside it with thresholds of its own. The general threshold sits at $1,075,000 and the premium at $6,571,000, and neither has moved since 2024. That page was last updated on 16 March 2026. A frozen threshold does quiet work, because the line stays put while land values do whatever they do. None of it applies to the surcharge, which starts at the first dollar.

Who sets the rate and who sends the bill

Revenue NSW administers all of it. The agency publishes the tests, the rates and the deadlines on pages carrying a last updated date, and the Chief Commissioner of State Revenue issues the assessments that land in letterboxes. What it does not publish is a count. There is no public figure for how many permanent residents have been assessed as foreign persons after a period overseas, nor for how many were later corrected. Without it, the scale of this across Western Sydney is guesswork, and whether any warning precedes an assessment is a question for the agency and the Treasurer.

The rates themselves are state revenue policy, a portfolio held by Daniel Mookhey MLC. Surcharge land tax went from 4 per cent to 5 per cent from the 2025 tax year, while the ordinary thresholds have not shifted since 2024. A permanent resident who spent half of 2026 with family in India meets all three settings at once, none of which was aimed at them.

The date that matters for new customers is 31 March 2027

Revenue NSW sets 31 March as the deadline for new customers to lodge or update their foreign status for surcharge land tax NSW, which for the 2027 land tax year means 31 March 2027, with other landowners updating by the due date of their assessment notice. The intended principal place of residence exemption must be claimed by 31 March 2027 or by the due date of the assessment notice. The agency runs a page for that purpose, headed check and update your foreign status. Anyone whose 2026 included a long absence is inside the window now.

Made in India Magazine is not a tax adviser and nothing here is advice about any particular household. A reader who recognises their own 2026 in these paragraphs should speak to a registered tax agent or a property lawyer about their own circumstances.

What makes this rule bite is how ordinary the trigger is. Nobody boards a flight to Hyderabad or Amritsar thinking about land value. The trip extends because a parent is unwell, because a funeral turns into a month of sorting out a house, or because the return paperwork takes longer than anyone expected. The tax does not ask why. It counts days. For a community keeping a household in Sydney and obligations in India, it is worth knowing the rule exists well before the assessment turns up.