Australia's Federal Parliament has formally approved a vacancy tax (Vacant Residential Property Tax) policy for overseas buyers. Vacancy tax, the full name of the vacant housing tax, has been in Australia since January 1, 2018. Victoria was the first state in Australia to impose a vacancy tax on homes that have been idle for more than six months a year, with a 1% vacancy tax on their value. The aim is to reduce the vacancy rate of (Inner and middle suburbs) in suburban Melbourne and Central.
But many people do not understand the content of the vacancy tax. Today, in a way that you can see clearly, we use laws and regulations to analyze the important content for you.
How do you define foreign buyers?
According to the Australian Aliens Investment Regulatory Commission (Foreign Investment Review Board,), the current definition is "foreign buyer", with the exception of the following categories:
- Australian citizen;
- Citizens of New Zealand;
- Permanent residence visa holder in Australia;
- Foreigners, but with their Australian citizenship spouse, or New Zealand citizenship spouse, or Australia permanent residence visa holder spouse, together with the purchase of Australian housing.
If I am currently holding a temporary visa for investment immigrants and I am already applying for a permanent residence visa, I am waiting for the result of the permanent residence visa, then am I a foreign buyer?
By FIRB's current definition, you count as a foreign buyer.
What kind of property involves paying vacancy tax?
The property must meet all the following conditions:
- Civil housing or land purchased by foreign buyers;
- Acquired after 7:30 (EDT) on 9 May 2017;
- The house is vacant for more than six months (cumulative time) in one year.
How do I define "empty year"?
Although Australia's fiscal year is from July 1 of each year to June 30 of the following year, the "one year" of the "residence vacant for more than six months in a year" under the vacancy tax statute is derived from foreigners. Can occupy the first day of the house, the beginning of the year.
If you buy a current home directly (for example, a visa applicant who invests in the 188 categories of immigrants can buy a current home as a self-housing), a new house or flower will be calculated according to (SettlementDate) on the trading day.
If you are buying residential land, start with the date when you get the permit (OccupationCertificate) after the house is built.
Therefore, every foreigner will have their own unique year of vacancy.
Why did we mention May 9 at the beginning of the article? Because assuming your property is closed after 7:30 on the night of May 9, 2017, for example, May 10, 2017, your "empty year" will soon expire! 20180104102201250.png
Under what circumstances are not defined as "vacant houses"
- A foreign buyer who buys a property, or a relative of the buyer, truly enters the property;
- The property was actually rented and leased for more than 30 days;
- The property is in a real state of renting. For example, public rental advertising lasts more than 30 days.
How to pay "empty tax"
The Australian Inland Revenue Service (ATO) is in charge of this tax. Foreign buyers are required to submit separate tax returns within 30 days of the end of the vacancy year, and the ATO will inform them in writing of the tax figures. Foreign buyers are required to pay the tax within 21 days of sending notice of payment upon receipt of ATO approval confirmation.
If you don't pay the "vacancy tax" on time,
The fine would be 250 times that of PenaltyUnit, or as much as $52, 500 in fines.
This regulation, in fact, is to avoid the increase in vacant housing, so that the number of houses circulating in the housing rental market to reduce this phenomenon. It is true that some foreign buyers are not in use after buying Australian houses.
