As part of the push to try and make housing more affordable, the Federal Government introduced Vacancy Fees for foreign owners of residential dwellings in Australia in December 2017. The vacancy fee provisions are to be found in the Foreign Acquisitions and Takeovers Act 1975.
Essentially, a vacancy fee is payable by a foreign person for any dwelling on residential land for any year (known as the vacancy year) if the dwelling is residentially occupied for less than 183 days in the vacancy year. To understand the implications of the Vacancy Fee it is important to understand the definitions of the key terms used in the legislation. The key terms and definitions are as follows:
If the Vacancy Fee applies to you are required to lodge a Vacancy Fee Return (one for each property) with the Australian Taxation Office (ATO) within 30 days of the end of each vacancy year. The ATO will then issue an assessment and the liability to pay the vacancy fee will be due at least 21 days from the date on the notice of assessment. Before you will be able to lodge a Vacancy Fee Return you will need to register on the Land and Water register as this will create a land registration number that you must use when completing the Vacancy Fee Return.
Should you have any queries regarding the Federal Vacancy Fee rules, please do not hesitate to contact our office.