1. GOLD COAST REAL ESTATE TEAM CONTACTS
Bryce Melville Rebecca Sheppard Yvette Mason Marieanne Golubinsky Meaghan Brodie
PARTNER SENIOR ASSOCIATE ASSOCIATE GRADUATE PARALEGAL
T: +61 7 5553 9424 T: +61 7 5553 9490 T: +61 7 5553 9530 T: +61 7 5553 9539 T: +61 7 5553 9411
Bryce.melville@minterellison.com Rebecca.sheppard@minterellison.com Yvette.mason@minterellison.com Marieanne.golubinsky@minterellison.com Meaghan.brodie@minterellison.com
Property Developments
2017 Budget introduces vacancy charge for foreign-owned vacant residential properties
The 2017 Budget introduces an annual levy for
foreign-owned vacant residential properties.
This ‘vacancy charge’ will be equivalent to the
relevant foreign investment application fee imposed
on the property when it was acquired.
This article sets out who the charge will apply to, how
the use of a property will be assessed, how the
charge is calculated and reporting obligations.
When will the vacancy charge apply?
The vacancy charge will apply to foreign persons who:
 make a foreign investment application for
residential property; or
 enter into a contract for a property in a
development which has a New Dwelling
Exemption Certificate,
after 7.30pm on 9 May 2017.
The vacancy charge will be payable if a property is not
occupied or genuinely available on the rental market
for at least six months per year.
How is the annual liability assessed?
The annual liability is assessed based on the
settlement date. The property:
 does not have to be occupied for a consecutive 6
month period;
 does not have to be occupied by the owner or
pursuant to a rental agreement;
 will be considered ‘used’ during a construction
period for a new build or the redevelopment of an
existing dwelling; and
 will be considered ‘used’ if it has genuinely been
made available for rent ie by advertising,
engaging a leasing agent etc.
The amount payable for the annual vacancy charge will
be the same amount as the:
 fee payable for the foreign investment application
for the property; or
 reconciliation fee paid for the property if it is
purchased under a New Dwelling Exemption.
Reporting obligations
The Australian Tax Office (ATO) will administer the
vacancy charge. Foreign persons and developers
need to notify the ATO of residential purchases upon
settlement (as detailed in their approval).
Foreign persons will need to report to the ATO annually
about their use of the property and may also need to
provide evidence of use. The vacancy charge will no
longer apply, however, if a person ceases to be a
foreign person.
Further information
If you would like advice on the implications of the
vacancy charge or assistance with your residential
conveyancing, please contact us.
*Disclaimer
The information contained in this update is intended as a guide only. Professional
advice should be sought before applying any of the information to particular
circumstances. While every reasonable care has been taken in the preparation of
this update, MinterEllison does not accept liability for any errors it may contain
12 June 2017