Foreign investors who own residential properties in Australia are required to submit a Vacancy Fee Return annually if their property is unoccupied for 183 days or more during a 12-month period. The return is essential to ensure compliance with Australian regulations regarding vacant properties owned by foreign nationals.
What is a vacancy fee return?
A vacancy fee return is an online form that you lodge using Online services for foreign investors once a year while you own the residential property.
The information required includes how many days in a vacancy year your property was occupied, that is:
- occupied by the owner living in the property
- rented by a tenant
- made genuinely available for rent.
Who must lodge a vacancy fee return
You must lodge a vacancy fee return if you:
- made a foreign investment application for residential property after 7:30 pm AEST on 9 May 2017
- purchased under a New or near-new dwelling exemption certificate that a developer applied for after 7:30 pm AEST on 9 May 2017.
The vacancy fee may also apply where a foreign person failed to submit a foreign investment application but purchased a residential property before 9 May 2017.
Key Points:
Submission Deadline: The Vacancy Fee Return must be lodged within 30 days of the end of each “vacancy year.” A vacancy year runs from 1 July to 30 June each year, and the return should reflect the property’s occupancy status during this period.
Vacancy Fee: If a property remains vacant for the specified period, foreign owners will be liable for a vacancy fee. This fee is calculated based on the foreign investment application fee. Starting from 1 April 2024, the vacancy fee will be doubled.
Ownership and Occupancy Requirements: The return must detail the length of time the property was either occupied by the owner, rented out, or available for rent. If the property is not rented out or occupied by the owner, it is considered vacant.
Multiple or Joint Ownership: In cases of joint ownership or multiple properties, each individual owner or group must submit separate returns for their share of the property or properties.
Penalties for Non-Compliance: Failure to submit the Vacancy Fee Return within the required timeframe will result in penalties. Additionally, if there are changes to the property’s occupancy status—such as selling the property or changes in the foreign investor’s status—these must be reported to the Australian Taxation Office (ATO).
Impact of Changes: The return must be updated if there are any changes, such as the property being sold or the foreign investor’s status changing. This ensures accurate reporting and compliance with Australian tax laws.
Foreign property owners are encouraged to review their property’s occupancy status carefully and ensure all returns are lodged within the specified deadlines to avoid penalties and additional fees.
For more details on how to submit the return and further guidance, please refer to the ATO’s official guidelines.
