According to international standards, a vacancy rate of 5% to 10% for commercial housing is considered reasonable, while a rate between 10% and 20% is considered a vacancy danger zone. In Australia, the vacancy rate has long been maintained below 5%, indicating strong housing demand. This is why more and more people choose to invest in Australian real estate.
In 2023, Australia's housing vacancy rate dropped below 1%. The increasing number of immigrants and international students has driven up rents, providing overseas property owners with substantial returns.
1. What is the Vacancy Fee in Australia?
The Vacancy Fee is a tax imposed on overseas owners of residential property in Australia. If the property is unoccupied for more than half the year (i.e., 183 days), the owner is required to pay this annual fee. The purpose of the tax is to reduce the housing vacancy rate and increase housing opportunities for Australian residents. This fee is collected by the Australian Taxation Office (ATO) based on the owner's submitted "Vacancy Fee Return."
2. Who Needs to Pay the Vacancy Fee in Australia?
Owners need to pay the Vacancy Fee if they meet the following conditions:
They are overseas owners, meaning they are not Australian citizens or usually do not reside in Australia (have not lived in Australia for at least 200 days in the past 12 months);
They own residential property that has not been occupied or publicly rented/sold for more than 183 days in a year;
The property was purchased with approval from the Foreign Investment Review Board (FIRB).
3. How Much is the Vacancy Fee in Australia?
According to the Australian Taxation Office (ATO) website, the Vacancy Fee is generally the same amount as the FIRB application fee paid when submitting a foreign investment application. The specific amount is calculated by the ATO based on the Vacancy Fee Return submitted by the owner, so there is no need for self-calculation.
4. How to Declare the Vacancy Fee in Australia
It is important to note that even if your property is rented for more than 183 days within a fiscal year, you still need to declare an exemption from the Vacancy Fee to the ATO annually.
All overseas buyers who have purchased residential properties approved by FIRB must declare the Vacancy Fee every year. The declaration form should include detailed information about the property to help the ATO determine whether the Vacancy Fee should be levied.
Buyers will receive reminder emails from the ATO each year. Even if no reminder is received, it is the owner's responsibility to remember to submit the declaration. The Vacancy Fee Return form can be downloaded from this link: https://www.ato.gov.au/FIRBvacancyfee/, and you can also contact a lawyer for assistance with the application.
The deadline for submitting the Vacancy Fee Return is within 30 days after every 12 months from the settlement date of the property purchase. For example, if the property settled on January 1, the declaration must be submitted by January 30 each year. Late payment may result in fines or interest charges.
After submission, you will receive a confirmation page detailing the amount of the Vacancy Fee and payment methods. The payment amount and due date will also be mentioned in the email.
5. How to Get Exemptions from the Vacancy Fee?
If you want to avoid paying the Vacancy Fee, the simplest way is to ensure that the property is not vacant, meaning it is occupied for more than half the year. Renting it out or having relatives and friends stay in it can help avoid the tax. Additionally, if you can prove that the property was not intentionally left vacant, such as being away for travel, you may be exempt from the Vacancy Fee.
Specifically, the following conditions can qualify for an exemption from the Vacancy Fee, but you still need to submit the declaration form and related proof documents:
The property is rented out or self-occupied for more than 6 months, or relatives/friends stay in it for more than 6 months;
The property is damaged, unsafe, or unsuitable for occupancy;
The property is subject to a court order or legal restriction that prohibits or limits occupancy;
The permanent resident of the house is unable to occupy it due to long-term hospitalization or care;
The registered owner has passed away and the estate is not yet settled;
The owner is no longer a foreign tax resident;
The property ownership has changed within the year.
For more information, visit the ATO website: https://www.ato.gov.au/General/Foreign-investment-in-Australia/Annual-vacancy-fee/#Vacancyfeeexemptions
It is important to note that even if a property is short-term rented (e.g., via Airbnb) for more than 183 days a year, it is still subject to the Vacancy Fee, as short-term rentals are not considered true residential use.
Comentários