Vacancy fee for foreign owners: the 183-day rule and the annual return

Who must lodge

You must lodge a vacancy fee return if you:

• made a foreign investment application for residential property after 7:30 pm AEST on 9 May 2017; or
• bought under a New or near-new dwelling exemption certificate that a developer applied for after that time.

The ATO adds that the fee may also apply where a foreign person failed to apply for approval but bought before 9 May 2017.

Joint tenants lodge one return for the dwelling and only one fee is payable. Tenants in common each lodge their own return, and each owner’s fee is based on the application fee that owner paid. Where several dwellings are built on the land, a return is due for each new dwelling. If you own vacant land with no dwelling built yet, no return is due; the obligation starts once a dwelling is built.

No return is due, but you must update your details in Online services for foreign investors, if during the vacancy year the dwelling is sold or otherwise transferred (including on the owner’s death) or you are no longer a foreign person.

The vacancy year

The vacancy year is each successive 12-month period starting on the dwelling’s occupation day, the first day you have the right to occupy it: usually settlement for an established dwelling, or the day the certificate of occupancy was issued for a new one. It is specific to each dwelling and is not a calendar or financial year.

The 30-day lodgment period starts the day after the vacancy year ends. In the ATO’s example, an apartment that settled on 5 October 2022 has a first vacancy year from 5 October 2022 to 4 October 2023, and the return is due by 3 November 2023.

When the home counts as occupied

A dwelling is residentially occupied if, for at least 183 days in the vacancy year:

• the owner or a relative of the owner genuinely lived in it as a residence; or
• it was occupied as a residence under a lease or licence with a minimum term of 30 days; or
• it was genuinely available as a residence on the rental market, with minimum terms of 30 days.

The 183 days do not have to be continuous: they can add up from several continuous periods of at least 30 days each. Short-term stays of less than 30 days, including through online stay sites, do not count, so a home used only for short stays is liable for the fee. To count as genuinely available, the home must be on the rental market, advertised publicly and offered at a market rent.

An established dwelling bought as a principal place of residence cannot be rented or leased; it must be genuinely occupied by the foreign owner or their family.

How much the fee is

The fee is based on the foreign investment application fee you paid when you applied, not on the current schedule. For vacancy years that start from 9 April 2024, the fee is double that application fee; for earlier vacancy years it equalled the application fee.

The ATO’s own examples:

• A new townhouse in Geelong bought for $850,000 with a $13,200 application fee, settled on 1 August 2022: a fee of $13,200 for the 2022-23 and 2023-24 vacancy years, and $26,400 for the vacancy year from 1 August 2024.
• A new Sydney apartment under $2 million with a $31,300 application fee paid in 2026: a vacancy fee of $62,600.

For a home approved in 2026-27, doubling the ATO’s application fee schedule for new dwellings and vacant residential land gives:

Application fees are indexed every 1 July. Special cases: if you bought under a developer’s New or near-new dwelling exemption certificate, the fee is based on what your application fee would have been without the certificate; if your application fee was waived, it is based on the lowest application fee that would have been payable.

Lodging and paying

You or your representative lodge the return through Online services for foreign investors (Lodgments, then Vacancy fee return). The confirmation page says whether a fee is payable and how much. You can pay when you lodge or within 30 days of lodging; the ATO then emails a notice of liability with the payment reference number (PRN) to use. Since July 2023 each registered dwelling has an asset ID (formerly the land registration number). If the occupancy date is missing from your asset, contact the ATO before lodging.

Exemptions, waivers and penalties

No fee is payable if the dwelling was incapable of being occupied as a residence for at least 183 days in the vacancy year, for example because it was damaged or unsafe, under substantial repairs or renovation, legally restricted by a court, tribunal or law, or because the person who normally lives there was in long-term in-patient, medical or residential care. You must still lodge the return to claim this, and may be asked for evidence. Waivers are granted only in limited circumstances, and the waiver form is not in Online services for foreign investors.

If you do not lodge by the due date, you may be liable for the fee regardless of how many days the home was occupied. Failing to lodge on time, or to keep records about your liability, can also lead to an infringement notice or a civil penalty. Keep the records for at least five years after the end of each vacancy year.

The ban on buying established homes

From 1 April 2025 to 30 June 2029, foreign persons are banned from buying established dwellings in Australia, with limited exceptions; the government extended the ban, which was due to end on 31 March 2027. It also covers temporary residents buying an established home to live in. Foreign persons can still apply to buy new or near-new dwellings, off-the-plan property, vacant residential land and established dwellings for redevelopment. Approval, fees and the exceptions are in the foreign buyers and FIRB guide; state surcharges are in foreign purchaser surcharge duty and land tax by state.

Which professional to consult

A conveyancer or lawyer can tell you the occupation day that starts your vacancy year and how the home is held (conveyancers). If you plan to rent the home, a real estate agent can list it publicly at a market rent, which is what the ATO looks for (real estate agents). The ATO notes that questions about paid tax agent services go to the Tax Practitioners Board.