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Updates on Vacancy Fee 2023
Who is liable to pay a vacancy fee?
Foreign owners of residential properties in Australia are required to pay an annual vacancy fee if their property is not residentially occupied or rented out for more than 6 months (183 days) in a year.
A property is considered ‘residentially occupied’ if:
- The owner or a relative of the owner occupies the property as a residence; or
- The property is occupied as a residence subject to a lease, for a minimum period of 30 days; or
- The property is available for occupation as a residence subject to a lease for a period of 30 or more days
If vacancy fees are not paid on time, the government may take action to recover the debt, which may include court proceedings, or taking ownership of the property.
Who must lodge a vacancy fee return?
The vacancy fee return applies to all foreign owners of residential property, who either:
- Made a foreign investment application to purchase a property after 9 May 2017 or;
- Purchased a residential property under a New Dwelling Exemption Certificate, which was applied for after 9 May 2017.
If the FIRB application date is before 9 May 2017, then there is no requirement to lodge the return each year or pay the vacancy fee.
All foreign owners of residential property must file a vacancy fee return for the previous year, regardless of whether the property was residentially occupied during the year, or a vacancy fee is not payable. The process is similar to lodging a personal tax return each year- each person must lodge a tax return regardless of whether tax is payable or not.
If the ATO determines that no vacancy fee is payable based on the Vacancy Fee Return, no amount will be required.
When does a vacancy fee return need to be lodged?
A vacancy fee return must be lodged with the ATO after the end of every 12-month period you own it. The time when you own it is the time from which you gained the right to occupy the property- usually, the completion date. For example, if you complete a property purchase on 1 January, you need to file a vacancy fee return by 30 January every year.
An important reminder to all foreign owners of property – remember the anniversary of your vacancy fee return and to file it every year. A failure to lodge a vacancy fee return within 30 days after a 12-month period, will result in you being required to pay the vacancy fee in relation to the property, even if it was occupied or rented out for more than 183 days. Civil penalties may also apply for failing to lodge the return with the ATO.
How much is the vacancy fee?
The vacancy fee will be the same amount as the FIRB application fee you paid at the time you submitted your application.
How to file a vacancy fee return
- Completed FIRB Vacancy Fee Form online. The vacancy fee return must be completed online and is available at https://www.ato.gov.au/FIRBvacancyfee/
- You must fill out the form and provide relevant details in relation to the property and the owner of the property.
- After lodgment of the Vacancy fee return, you will see a confirmation page containing reference details, any amount you need to pay and how to pay. The amount of payment and the payment due date will be contained within an email sent in response to lodgment.
If you need advice regarding property law, please contact our office: 02 9283 8588
Ge Wu is the solicitor director of Legal Point Lawyers & Attorneys. He has been admitted to practise law since 2005. Throughout his practice, Ge Wu predominantly practises in the areas of Property Law, Immigration Law, Commercial Law, Civil Litigation and Family Law.
His experience covers all aspects of property law, commercial/retail lease, immigration law and civil litigation, while at the same time, he also has experience in family law, criminal law and other areas such as will-drafting and general advice.
He has frequently been instructed by corporate clients in pre-acquisition due diligence reports, structuring property development, land/shopping centre acquisitions, G.S.T. and stamp duty advice for buying/selling businesses, as well as share transfers and company re-structures.
Ge Wu has been appointed as Notary Public since 2011 and started to provide Notary Public service to clients from different cultural backgrounds.
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