Come across this today: Update from ATO: Foreign investors are required to lodge an Annual Vacancy Fee Return with the ATO within 30 days of the end of each Vacancy Year. This page contains the annual vacancy fee return form and payment instructions. How to complete your annual vacancy fee return This is not my area although I heard about it here and there, definitely dont know, dont want to know the details Just wondering whether anyone from PC here have paid this, and how much income did the ATO generate from this?
The trigger for this form is determined by a (valid) Foreign Investment Review Board application. Invalid owners without FIRB approval are illegal owners and may later be forced to sell. One of the integrity measures the Govt introduced was this vacant property rule which applies a tax to those affected FIRB properties that are vacant to discourage it. The tax applies to vacancies of 183days + The fee also impacts tax deductions as it may indicate property not available for rent but 'banked" by the foreign owner. Its like land banking but for homes, apartments, units, vacant land, farm land and more etc. Avoiding the fee is easy. Rent the property out and lodge a tax return. The annual vacancy fee is basically the same as the FIRB approval fee, but could be paid annually. eg $5700 for a property costing $1m of less. For apartments this can mean multiple titles and ...multiple fees. The more expensive the property the more the fee is. And the annual vacancy tax. Fees - residential land [GN29] | Foreign Investment Review Board The late lodgement rule is nasty. If you dont lodge by the due date it is automatically assessed as vacant. Plus an infringement penalty. This isnt intended to produce billions but is intended to weaken the exposure of the Australian economy to foreign purchasers of land AND those that fail to support the economy by leaving it vacant contrary to national interests that property is used for economic activity and housing. Remember all the media articles back in 2014-2016 ? Well the Government acted to help buyers by stopping the plethora of foreign buyers at auctions by ramping up a range of measures. If I recall correctly prior to 2016 almost NO foreign buyer was penalised for FIRB non-compliance. Since the ATO assumed reporting and regulatory oversight its has risen and demand has plumetted. Forced sales has spiked too. More foreign buyers forced to sell their homes in FIRB crackdown As a property focussed tax practice we now actively monitor for client non-compliance when buying or owning property and have referred many cases to legal counsel for clients to ensure they are compliant. Most never sought approval and were exempt anyway. Not all.
