A GROUP of ageing NSW residents is caught in a bureaucratic financial nightmare, forced to pay thousands of dollars a year to live in their own homes.
Hundreds of retired foreign nationals came to Australia about 15 years ago on a special 410 visa, which allowed them to live near their adult migrant children and grandchildren. There are only about 400 of them remaining in NSW and they are now in their 70s, 80s and 90s.
The majority are British expats and all had to meet stringent finance and health insurance requirements to ensure they were not a burden on the Australian taxpayer.
Most bought a home near their families and became active members of their communities, joining sports clubs and social groups, volunteering for charities, helping care for their grandchildren and paying rates and taxes.
Taxed out of homes
However, last year they were shocked to discover they had been targeted by the state government and would have to pay thousands of dollars in land tax surcharge on the land their homes stand on.
Normally no tax is payable on land on which a person’s only home stands. In a catch-all move, they were lumped in with rich foreign speculators who were snapping up investment properties, mostly in Sydney.
In an attempt to discourage the practice, the state government implemented a .75 per cent foreign investor land tax surcharge. This year the surcharge has gone up to 2 per cent, resulting in bills of around $8000 to $10,000 for the 410 visa holders – an impost these fixed-income retirees are struggling to pay.
Some say the surcharge is sending them to the wall, while others have relocated back to their home country despite having severed all supports there. Members of this small group have made repeated, but so far unsuccessful, approaches to the Premier’s Department and Treasury asking for an exemption.
They say they have been met with bureaucratic intransigence. Ed Cowie and his wife Valerie came to NSW in 2003 to be near one of their adult children. They live at Terrigal on the Central Coast.
“Our families are here, we have tax file numbers, we pay taxes here, we’re members of our communities and this is just not fair,” he said. “We’re not foreign speculators; we’re just ordinary retirees who have been caught up in this net.” Mr Cowie said those affected worried about what would happen next year.
“They could put the surcharge up to 8 per cent or to whatever they want and then what would we do?” He said the group was also being penalised by having to pay an 8 per cent foreign investor surcharge again if they wanted to downsize.
The Treasurer’s Department provided the following comment on the situation: “The Foreign Investor Surcharge is designed to ensure foreign persons who enjoy the benefits of living in NSW also make a fair contribution to the cost of running our state. “While the government does not intend to make amendments at this time, we always remain open to feedback and will continue to monitor the impacts of the foreign investor surcharge to ensure it is achieving its intended objective.”
- Edward Cowie can be contacted on 4365-3326, email edwardcowie47@gmail.com