Tax Update - September
Vacancy levy for foreign residential property investors
In December 2017 the Australian Government introduced an annual vacancy fee for foreign owners of residential dwellings.
Under the legislation, foreign owners of residential dwellings in Australia are required to pay an annual vacancy fee if their dwelling is not residentially occupied or rented out for more than 183 days (six months) in a year.
This vacancy fee form must be lodged by foreign owners of residential dwellings who made a foreign investment application for residential property after 7.30pm AEST on 9 May 2017.
If you can show that for at least 183 days in a vacancy year, your dwelling was incapable of being occupied as a residence you will not be liable to pay the vacancy fee. You must lodge a vacancy fee return to claim this exemption and provide supporting evidence.
Foreign residents and main residence exemption
In the 2017-18 Budget, the government announced that foreign residents will no longer be entitled to claim the main residence exemption when they sell property in Australia.
This change is not yet law and is subject to parliamentary process.
The change will apply to foreign residents as follows:
- for property held prior to 7:30pm (AEST) on 9 May 2017, the exemption will only be able to be claimed for disposals that happen up until 30 June 2019 and only if they meet the requirements for the exemption. For disposals that happen from 1 July 2019 they will no longer be entitled to the main residence exemption.
- for property acquired at or after 7:30pm (AEST) 9 May 2017, the main residence exemption will no longer apply to disposals from that date.
This change will only apply if you are not an Australian resident at the time of the disposal (contract date).
Superannuation Guarantee Amnesty
On 24 May 2018, Minister for Revenue and Financial Services announced the commencement of a 12 month Superannuation Guarantee Amnesty (the Amnesty).
The Amnesty is a one-off opportunity for employers to self-correct past super guarantee (SG) non-compliance without penalty. Subject to the passage of legislation, the Amnesty will be available from 24 May 2018 to 23 May 2019.