“We don't handle stamp duty assessments directly nor do we advise about this issue. We merely handle the conveyance and aren't experts in surcharge duty implications.”
Note added on republication
The interest analysis in this note reflects the law as it stood when Rahman was decided. Section 25(3) of the Taxation Administration Act 1996 (NSW) now requires interest to be remitted only in accordance with published guidelines, and Revenue NSW’s TAA 001 Remission of Interest Guidelines took effect on 1 July 2025. Under TAA 001 interest is treated as a single amount against a closed list of grounds, and reasonable care is not among them. The penalty tax analysis is unaffected.
That email came from the buyers' own lawyers. It was in evidence. The buyers' whole defence: they relied on those lawyers.
Rahman v Chief Commissioner of State Revenue [2026] NSWCATAD 172 (9 June 2026).
What Happened
First, the basics. A “foreign person” buying residential land in NSW pays an extra tax on top of ordinary stamp duty: surcharge purchaser duty. Permanent residents can escape it by living in the property as their home for a continuous 200 days in the first year (s 104ZKA). Buyers sign a declaration stating where they stand.
Two buyers purchased in 2021. Each declared themselves an “exempt permanent resident”. Wrongly - nobody disputed that [67]. The surcharge went unpaid. After an investigation, Revenue NSW assessed it in October 2024, plus interest and penalty tax.
The buyers paid the surcharge and fought only the interest and penalty. Their argument before NCAT: they relied on their lawyers.
The Proof Problem
Interest has two layers. The market rate compensates the government for getting its money late - almost never waived. The premium rate is a punishment on top - it can be waived where the taxpayer took reasonable care. Penalty tax is separate: 25% of the unpaid tax, cut to 20% here for disclosure during the investigation. It can be wiped entirely where reasonable care was taken.
The fight came down to reasonable care. And the taxpayer must prove it.
The Tribunal accepted lawyers were hired [51]. But no retainer was in evidence. Nothing showed what the lawyers asked about residency, what the buyers told them, or what advice (if any) came back [53]-[54]. There was the email above, and a belief that advice should have been given. A belief is not evidence [55].
No proof of advice, no reasonable care. The assessment was confirmed in full.
Compare Golden Age [2024] NSWSC 249: that taxpayer proved it sought solicitors' advice and acted on it. The premium interest was waived entirely. Same defence. Different paperwork.
The Practical Takeaway
First, “my adviser should have told me” wins nothing. “Here is the advice I asked for, received and followed” wins. Keep the retainer, the question and the answer in writing.
Second, before the declaration is signed, someone must actually answer the question: is this buyer a foreign person? Conveyancing retainers often exclude duty advice - check who is covering it.
Third, process mistakes can be forgiven. These buyers filed in the wrong tribunal, arrived 275 days late, yet were heard (a father's illness and death; no prejudice). Missing evidence cannot. They won the right to be heard and lost everything else.
When did you last see written proof of duty advice in a purchase file?
General information only. This note was written as at 12 June 2026 and the law may have changed since. It is not legal or tax advice, does not take account of your circumstances, and must not be relied upon as a substitute for advice on your own matter.