Rent out your vacant property or pay a fine – Malcolm & Co warn Australians Overseas

There are two bills currently in front of Parliament which, if passed, will impose a vacancy fee on foreign persons who own property in Australia that is vacant for at least 183 days in a 12-month period. 

The fee will be payable by foreign persons as defined in the Foreign Acquisitions and Takeovers Act 1975 (“FATA”) who purchase a residential property.    More importantly - Australian citizens who own property in Australia who cease being Australian residents for tax purposes may become liable for this fee. 

The fee only applies for purchases of residential property where the purchase was not approved under the FATA by 7.30pm on 9 May 2017.  The fee will be based on the purchase price of the property and the type of acquisition. 

Occupation is the key!  The fee will only be payable where the property has been unoccupied for at least 183 days in a 12-month period.  A property will be considered unoccupied if it is not occupied under a lease or license with a term of at least 30 days.  This means that short-term rental options (such as Airbnb) will not be considered proper occupation that meet these criteria. 

If the property is advertised publicly as being genuinely available for rent at market rates for a term of at least 30 days then those days will not be counted as being unoccupied days.  Advertising at inflated rents to discourage rental will be investigated!

If you’d like to know more, please contact our office.