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

Background

The plaintiff taxpayer was a national of New Zealand who challenged the validity of the Land Tax Act 2005 (Vic) under s 109 of the Constitution to the extent that it purported to impose a liability on him to pay absentee owner surcharge.

The basis for the challenge was a claim that the imposition of absentee owner surcharge was an imposition of “more burdensome” taxation than the taxation to which Australian nationals in the same circumstances were subjected, and so was inconsistent with s 5(1) of the International Tax Agreements 1953 (Cth) (ITA Act) (which gave the force of Commonwealth law to the non-discrimination clause in the applicable double taxation treaty between Australia and New Zealand).

Issue

Whether the absentee owner surcharge imposed on absentee owners under the Land Tax Act 2005 (Vic) is valid in relation to absentee owner surcharge payable on or after 1 January 2018.

Decision

On 15 October 2025, the High Court unanimously rejected the taxpayer’s challenge.

It found that the Treasury Laws Amendment (Foreign Investment) Act 2024 (Cth) applied retroactively to remove any inconsistency between the Land Tax Act and s 5(1) of the ITA Act in relation to absentee owner surcharge payable on or after 1 January 2018, and was constitutionally valid in that retroactive operation. 

The High Court’s reasoning would apply in materially the same way to any equivalent challenge to any foreign purchaser additional duty imposed on foreign purchasers under the Duties Act 2000 (Vic).

Following the High Court’s decision, the position is that the imposition of foreign purchaser additional duty or absentee owner surcharge payable on or after 1 January 2018 is valid. 

As such, any claim that foreign purchaser additional duty or absentee owner surcharge payable on or after 1 January 2018 is invalid because of an inconsistency between s 5(1) of the ITA Act and the Land Tax Act or Duties Act can no longer be maintained.

View the decision summary by the High Court.