If you are a foreign property owner in Australia, you are required to lodge a vacancy fee return for your residential property. It must be lodged annually within 30 days after the end of each vacancy year. This obligation applies to foreign investors who applied for property ownership after 9 May 2017 or purchased under a new or near-new dwelling exemption certificate. A foreign owner must lodge the return regardless of whether the property was occupied or rented.

A vacancy year is a 12-month period starting from the occupation day of the property, which is typically the settlement day for an established property or the day a certificate of occupancy is issued for a new one. 

The vacancy fee applies if the property is not residentially occupied for at least 183 days or six months in a 12-month period. To be considered occupied, the dwelling must be either lived in by the owner or a relative, leased for a minimum of 30 days at a time, or genuinely available on the rental market at market rent. Short-term rentals (less than 30 days) do not count towards the 183-day requirement. If the return is not lodged on time, a vacancy fee may still apply, even if the property was occupied.

From 9 April 2024, the vacancy fee will be double the original foreign investment application fee. Some exemptions exist, such as if the property was undergoing substantial repairs, deemed unsafe, or if the owner was receiving long-term medical care. Owners must keep records for at least five years and update details if their foreign ownership status changes. Failure to comply can result in civil penalties or infringement notices from the Australian Taxation Office (ATO).

Australian citizens living abroad (expats) are not considered foreign owners, so they are not required to lodge a vacancy fee return.

Permanent residents (PRs) and New Zealand citizens with a Special Category Visa (Subclass 444) are also not classified as foreign owners, meaning they do not need to pay the vacancy fee.