A vacancy fee is payable by a foreign person for any dwelling on residential land, for any year (called a vacancy year), if the dwelling is residentially occupied for less than 183 days in the year.

A dwelling is residentially occupied on a day in any of the following circumstances (or any combination of these circumstances over the vacancy year):

  (a)   the foreign person, or a relative of the foreign person, genuinely occupies the dwelling as a residence (whether or not with other persons);

  (b)   the dwelling is genuinely occupied as a residence under a lease or licence with a term of 30 or more days;

  (c)   the dwelling is genuinely available for occupation as a residence under a lease or licence with a term of 30 or more days.

The amount of the vacancy fee is found in regulations made under the Foreign Acquisitions and Takeovers Fees Imposition Act 2015 . However, a vacancy fee may be waived or remitted.

The foreign person is required to give a vacancy fee return to the Commissioner of Taxation after the end of each vacancy year for a dwelling. The person must also keep all relevant records for 5 years after disposal of the interest in residential land.

Unpaid vacancy fees for a dwelling may be recovered as a debt, or by the creation of a charge over Australian land in which an interest is held by the foreign person. The charge also secures any unpaid penalties for contraventions of civil penalty provisions under this Part relating to giving annual returns and keeping records.