If you're a foreign resident who owns Australian property you have lodgment and payment obligations.
If you're a foreign person (including a temporary resident or foreign non-resident) and you plan to invest in Australian residential property there are obligations you will need to meet under Australian law.
You'll need to work out your residency status for tax purposes. Check your residency as:
If you're a foreign resident and acquire an interest in Australian real property:
- you need to apply for an Australian tax file number (TFN) as soon as possible so you can meet your Australian tax obligations
- you must report any income from renting or selling the property by lodging an Australian tax return, and pay any tax owing.
If you're a foreign owner of a residential dwelling you may be required to lodge an annual vacancy fee return to report on the residential use of your property.
Any rental or lease payments for your Australian property must be declared as income in an Australian tax return, whether or not the payments are actually paid to you.
If you sell (or otherwise dispose of) an interest in taxable Australian property, you must:
- report it in an Australian tax return
- pay capital gains tax on any profit.
You may also need to update the Register.
Taxable Australian property includes houses, apartments and commercial buildings.
Your interest in the property may be:
- a direct interest – that is, complete or partial ownership of the property
- an option or right – such as a contract to purchase property 'off the plan'
- an indirect interest – that is, ownership of at least 10% of an entity whose value is mainly attributable to Australian real property.
In the year you dispose of your interest in a property, you need to work out your net capital gain or capital loss and report it in an Australian tax return. If you have made a capital gain you will pay tax on the gain.
We undertake compliance action to identify foreign residents that have not declared income and paid their tax obligations. This includes data matching with overseas and Australian financial institutions and property records.
An off-the-plan purchase occurs when you enter into a contract to purchase new residential taxable Australian property, before the construction is completed. At this stage you are purchasing a contractual right to have the premises built.
If you dispose of this contractual right before the construction is completed, you will have a capital gains tax obligation.
If you build new residential premises for sale, you will be liable for goods and services tax (GST) on the sale and entitled to claim GST credits for related purchases. GST does not apply to the sale of existing residential premises.
Commercial premises are things like shops, factories and offices.
Most residential accommodation is exempt from GST.If you're a foreign resident who acquires an interest in Australian property you have lodgment and payment obligations.