Australian Property | Overseas Buyers, Take Note: These Are Issues You May Never Have Known About!
1. When overseas investors purchase land, can the land be resold before construction begins?
Yes, it can. In some cases, for various reasons, an overseas investor may be unable or unwilling to commence construction after purchasing the land, or may have the opportunity to resell the land to a new buyer. Currently, there is no law preventing an overseas investor from reselling the land to someone else.
Furthermore, under FIRB policy, overseas investors cannot purchase established homes. In practice, however, "there are only established homes, not established land" — meaning that before any building is constructed, there is no dwelling standing on the land, so the land is not classified as an existing residence. It is therefore not subject to the "established home" restriction and can be purchased by a new overseas investor. Put simply, if an overseas investor buys an apartment in Australia, once it is handed over they cannot sell it to another overseas person and can only sell it to a local resident with the appropriate status. But if what they purchased is Australian land, then after the land is handed over and before construction begins, it can be sold to a local resident or an overseas investor. This gives a much wider range of potential buyers for the land transfer, making it more convenient for an overseas investor who has purchased land but is unable to build to transfer it.
2. Vacancy fee return for foreign owners
Some clients receive a penalty notice from the Australian Taxation Office (ATO) regarding a vacant property, when in fact the property was not vacant at all — they simply forgot one step, namely lodging the annual vacancy fee return. If there is a dwelling on your land, you must lodge an annual vacancy fee return within 30 days of the end of each 12-month period of your ownership, known as a vacancy year. If your dwelling is not occupied or genuinely available for rent for more than 183 days during the vacancy year, you may be liable to pay a vacancy fee.
The ATO will usually send you a reminder letter to the email address you provided on the Land and Water Register, prompting you to lodge your vacancy fee return. This email contains the information you need to lodge your vacancy fee return. Please note that regardless of whether the property was occupied for 183 days within the year, foreign owners are required to lodge a return. If, based on the information submitted, no vacancy fee is payable to the ATO, then no fee will apply.
Even if you do not receive a reminder letter, you still need to lodge a vacancy fee return. If you have not yet registered your property on the Land and Water Register and have not received a vacancy fee reminder letter, please first lodge your registration on the Land and Water Register. Registration is free of charge.
If your property is vacant land, you only need to lodge a vacancy fee return once a dwelling has been built on the land.