Foreign owners of Australian property: Include the vacancy fee as part of your annual tax return
Owning property in Australia that is left vacant for periods of time – or indefinitely – is subject to a 'vacancy fee' and it must be included in your Australian tax return
The ATO is reminding taxpayers to complete the Vacancy Form and pay the vacancy fee as part of their annual returns. The vacancy fee is equal to the initial foreign investment application fee (currently $5,500 for properties acquired for $1m or less). The vacancy fee can also apply even if the initial application fee was waived.
The vacancy fee was introduced in 2017 and applies to property that is not occupied or available to rent for substantial periods of time.
Foreign owners can avoid the fee by living in the property (or have a family member live in the property), leasing the property, or making it available for rent, for a total of 183 days in a 12-month period. A property is genuinely available for rent if it is made available on the rental market; advertised publicly; and, available at a market rent.
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This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.