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This is a Bill, not an Act. For current law, see the Acts databases.
2016-2017
The Parliament of the
Commonwealth of Australia
HOUSE OF REPRESENTATIVES
Presented and read a first time
Treasury Laws Amendment (Housing
Tax Integrity) Bill 2017
No. , 2017
(Treasury)
A Bill for an Act to amend the Income Tax
Assessment Act 1997 and the Foreign Acquisitions
and Takeovers Act 1975, and for related purposes
No. , 2017
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
i
Contents
1
Short title ........................................................................................... 1
2
Commencement ................................................................................. 1
3
Schedules ........................................................................................... 2
Schedule 1--Travel related to use of residential premises
3
Income Tax Assessment Act 1997
3
Schedule 2--Limiting depreciation deductions for assets in
residential premises
5
Income Tax Assessment Act 1997
5
Schedule 3--Vacancy fees for foreign acquisitions of residential
land
11
Part 1--Amendments
11
Foreign Acquisitions and Takeovers Act 1975
11
Taxation Administration Act 1953
24
Part 2--Application of amendments
26
No. , 2017
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
1
A Bill for an Act to amend the Income Tax
1
Assessment Act 1997 and the Foreign Acquisitions
2
and Takeovers Act 1975, and for related purposes
3
The Parliament of Australia enacts:
4
1 Short title
5
This Act is the Treasury Laws Amendment (Housing Tax Integrity)
6
Act 2017.
7
2 Commencement
8
(1) Each provision of this Act specified in column 1 of the table
9
commences, or is taken to have commenced, in accordance with
10
column 2 of the table. Any other statement in column 2 has effect
11
according to its terms.
12
13
2
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
No. , 2017
Commencement information
Column 1
Column 2
Column 3
Provisions
Commencement
Date/Details
1. Sections 1 to 3
and anything in
this Act not
elsewhere covered
by this table
The day this Act receives the Royal Assent.
2. Schedules 1
and 2
The first 1 January, 1 April, 1 July or
1 October to occur after the day this Act
receives the Royal Assent.
3. Schedule 3
A single day to be fixed by Proclamation.
However, if the provisions do not commence
within the period of 6 months beginning on
the day this Act receives the Royal Assent,
they commence on the day after the end of
that period.
Note:
This table relates only to the provisions of this Act as originally
1
enacted. It will not be amended to deal with any later amendments of
2
this Act.
3
(2) Any information in column 3 of the table is not part of this Act.
4
Information may be inserted in this column, or information in it
5
may be edited, in any published version of this Act.
6
3 Schedules
7
Legislation that is specified in a Schedule to this Act is amended or
8
repealed as set out in the applicable items in the Schedule
9
concerned, and any other item in a Schedule to this Act has effect
10
according to its terms.
11
Travel related to use of residential premises Schedule 1
No. , 2017
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
3
Schedule 1--Travel related to use of
1
residential premises
2
3
Income Tax Assessment Act 1997
4
1 Section 12-
5 (table item headed "travel expenses")
5
Omit:
6
see also substantiation
substitute:
7
travel related to the use of residential premises as
residential accommodation ..........................................
26-31
see also substantiation
2 After section 26-30
8
Insert:
9
26-31 Travel related to use of residential premises as residential
10
accommodation
11
(1) You cannot deduct under this Act a loss or outgoing you incur,
12
insofar as it is related to travel, if:
13
(a) it is incurred in gaining or producing your assessable income
14
from the use of
*
residential premises as residential
15
accommodation; and
16
(b) it is not necessarily incurred in carrying on a
*
business for the
17
purpose of gaining or producing your assessable income.
18
Exception--kind of entity
19
(2) Subsection (1) does not stop you deducting a loss or outgoing if, at
20
any time during the income year in which the loss or outgoing is
21
incurred, you are:
22
(a) a
*
corporate tax entity; or
23
(b) a
*
superannuation plan that is not a
*
self managed
24
superannuation fund; or
25
(c) a
*
managed investment trust; or
26
(d) a public unit trust (within the meaning of section 102P of the
27
Income Tax Assessment Act 1936); or
28
Schedule 1 Travel related to use of residential premises
4
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
No. , 2017
(e) a unit trust or partnership, if each
*
member of the trust or
1
partnership is covered by a paragraph of this subsection at
2
that time during the income year.
3
3 After subsection 110-38(4)
4
Insert:
5
(4A) Expenditure does not form part of any element of the cost base to
6
the extent that section 26-31 prevents it being deducted.
7
Note:
Section 26-31 denies deductions for travel related to the use of
8
residential premises as residential accommodation.
9
4 After subsection 110-55(9H)
10
Insert:
11
(9J) Expenditure does not form part of the reduced cost base to the
12
extent that section 26-31 prevents it being deducted.
13
Note:
Section 26-31 denies deductions for travel related to the use of
14
residential premises as residential accommodation.
15
5 Application
16
The amendments made by this Schedule apply to a loss or outgoing
17
incurred on or after 1 July 2017.
18
Limiting depreciation deductions for assets in residential premises Schedule 2
No. , 2017
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
5
Schedule 2--Limiting depreciation deductions
1
for assets in residential premises
2
3
Income Tax Assessment Act 1997
4
1 Section 12-
5 (table item headed "capital allowances")
5
Omit:
6
reducing deductions .......................................................... 40-25, 40-290
substitute:
7
reducing deductions .......................................................... 40-25, 40-27, 40-290
and 40-291
2 After subsection 25-47(4)
8
Insert:
9
(4A) You must further reduce the amount you can deduct under this
10
section if your deductions for the asset have been reduced under
11
section 40-27 (about second-hand assets in residential property).
12
The reduction is by the same proportion you reduce the balancing
13
adjustment amount for the asset under section 40-291.
14
3 At the end of subsection 40-25(2)
15
Add:
16
Note:
You may have to make a further reduction under subsections (3) and
17
(4) or section 40-27.
18
4 After section 40-25
19
Insert:
20
40-27 Further reduction of deduction for second-hand assets in
21
residential property
22
(1) In addition to subsections 40-25(2) to (4), you may have to further
23
reduce your deduction for a
*
depreciating asset for the income
24
year.
25
Schedule 2 Limiting depreciation deductions for assets in residential premises
6
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
No. , 2017
(2) Reduce your deduction by any part of the asset's decline in value
1
that is attributable to your use of it, or your having it
*
installed
2
ready for use, for the
*
purpose of producing assessable income:
3
(a) from the use of
*
residential premises to provide residential
4
accommodation; but
5
(b) not in the course of carrying on a
*
business;
6
if:
7
(c) you did not
*
hold the asset when it was first used, or first
8
installed ready for use, (other than as trading stock) by any
9
entity; or
10
(d) at any time during the income year or an earlier income year,
11
the asset was used, or installed ready for use, either:
12
(i) in residential premises that were one of your residences
13
at that time; or
14
(ii) for a purpose that was not a
*
taxable purpose, and in a
15
way that was not occasional.
16
Note:
Your deduction could be reduced to nil if the purpose to which
17
paragraphs (a) and (b) relate is your only taxable purpose for using the
18
asset or having the asset installed ready for use.
19
Exception--kind of entity
20
(3) Subsection (2) does not apply to you for the asset if, at any time
21
during the income year, you are:
22
(a) a
*
corporate tax entity; or
23
(b) a
*
superannuation plan that is not a
*
self managed
24
superannuation fund; or
25
(c) a
*
managed investment trust; or
26
(d) a public unit trust (within the meaning of section 102P of the
27
Income Tax Assessment Act 1936); or
28
(e) a unit trust or partnership, if each
*
member of the trust or
29
partnership is covered by a paragraph of this subsection at
30
that time during the income year.
31
Exception--certain assets in new residential premises
32
(4) Paragraph (2)(c) does not apply to you for the asset if:
33
(a) the
*
residential premises referred to in paragraph (2)(a) (the
34
current premises) are supplied to you as new residential
35
premises on a particular day (the current supply day); and
36
Limiting depreciation deductions for assets in residential premises Schedule 2
No. , 2017
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
7
(b) the asset is supplied to you as part of that supply of the
1
current premises; and
2
(c) at the time you first
*
hold the asset as a result of that supply,
3
the asset is used, or
*
installed ready for use, in:
4
(i) the current premises; or
5
(ii) any other real property in which an interest was
6
supplied to you as part of that supply of the current
7
premises; and
8
(d) at any earlier time, no entity was residing in any residential
9
premises in which the asset was used, or installed ready for
10
use, at that earlier time; and
11
(e) no amount can be deducted under this Division, or under
12
Subdivision 328-D, for the asset for any income year by any
13
previous holder of the asset.
14
Note:
An entity residing at an earlier time in other residential premises in the
15
same complex will not cause paragraph (d) to prevent this subsection
16
from applying.
17
(5) However, disregard paragraph (4)(d) for an earlier time if:
18
(a) the asset was used, or installed ready for use, in the current
19
premises at that time; and
20
(b) both that time, and the current supply, happen during the
21
6-month period starting on the day the current premises
22
became new residential premises.
23
Exception--low-value pools
24
(6) Subsection (2) does not apply to
*
depreciating assets allocated to a
25
low-value pool.
26
Note:
See Subdivision 40-E for low-value pools.
27
5 After section 40-290
28
Insert:
29
40-291 Reduction for second-hand assets used in residential
30
property
31
(1) In addition to section 40-290, you must reduce the amount (the
32
balancing adjustment amount) included in your assessable
33
income, or that you can deduct, under section 40-285 for a
34
Schedule 2 Limiting depreciation deductions for assets in residential premises
8
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
No. , 2017
*
depreciating asset if your deductions for the asset have been
1
reduced under section 40-27.
2
(2) The reduction is the following, as increased under subsection (3) if
3
applicable:
4
Sum of section 40-27 reductions
Balancing adjustment amount
Total decline
ï‚´
5
where:
6
sum of section 40-27 reductions is the sum of:
7
(a) the reductions in your deductions for the asset under
8
section 40-27; and
9
(b) if there has been roll-over relief for the asset under
10
section 40-340--the reductions in deductions for the asset for
11
the transferor or an earlier successive transferor under
12
section 40-27; and
13
(c) if you
*
hold the asset as the
*
legal personal representative of
14
an individual--the reductions in deductions for the asset for
15
the individual under section 40-27.
16
total decline is the sum of:
17
(a) the decline in value of the
*
depreciating asset since you
18
started to
*
hold it; and
19
(b) if there has been roll-over relief for the asset under
20
section 40-340--the decline in value of the asset for the
21
transferor or an earlier successive transferor; and
22
(c) if you hold the asset as the
*
legal personal representative of
23
an individual--the decline in value of the asset for the
24
individual.
25
(3) If:
26
(a) the
*
cost (for you) of the asset (the current asset) was
27
worked out under section 40-205 (Cost of a split depreciating
28
asset) or 40-210 (Cost of merged depreciating assets); and
29
(b) you used the
*
depreciating asset from which the current asset
30
was split, or a depreciating asset that was merged into the
31
current asset, or had it
*
installed ready for use, for the
32
purpose to which paragraphs 40-27(2)(a) and (b) relate;
33
Limiting depreciation deductions for assets in residential premises Schedule 2
No. , 2017
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
9
the reduction includes an increase equal to such amount as is
1
reasonable having regard to the extent of the use referred to in
2
paragraph (b) of this subsection.
3
6 Section 40-435
4
Before "When", insert "(1)".
5
7 At the end of section 40-435
6
Add:
7
(2) For the purposes of subsection (1), disregard a
*
taxable purpose
8
that is the
*
purpose of producing assessable income:
9
(a) from the use of
*
residential premises to provide residential
10
accommodation; but
11
(b) not in the course of carrying on a
*
business;
12
if, apart from subsections 40-25(5) and 40-27(6), section 40-27
13
would reduce your deductions under subsection 40-25(1) for the
14
asset.
15
8 Paragraph 104-235(1)(b)
16
Repeal the paragraph, substitute:
17
(b) at some time when you held the asset, you used it, or had it
18
*
installed ready for use, for:
19
(i) a purpose other than a
*
taxable purpose; or
20
(ii) the purpose to which paragraphs 40-27(2)(a) and (b)
21
relate (about second-hand assets in residential property).
22
9 Subsection 104-240(1) (paragraph (a) of the definition of
23
sum of reductions)
24
Omit "section 40-25", substitute "sections 40-25 and 40-27".
25
10 Paragraph 250-290(2)(c)
26
After "40-290,", insert "40-291,".
27
11 After subsection 328-175(9)
28
Insert:
29
Schedule 2 Limiting depreciation deductions for assets in residential premises
10
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
No. , 2017
Exception: second-hand assets used in residential property
1
(9A) You cannot deduct amounts for a
*
depreciating asset under this
2
Subdivision to the extent that section 40-27 prevents you from
3
deducting amounts under subsection 40-25(1) for the asset.
4
12 Subsection 995-1(1)
5
Insert:
6
new residential premises has the same meaning as in the
*
GST
7
Act.
8
13 Application of amendments
9
(1)
The amendments made by this Schedule apply to an entity, for income
10
years commencing on or after 1 July 2017, for assets:
11
(a) acquired by the entity under contracts entered into; or
12
(b) otherwise acquired by the entity;
13
at or after 7.30 pm, by legal time in the Australian Capital Territory, on
14
9 May 2017.
15
(2)
The amendments made by this Schedule also apply to the entity, for
16
income years commencing on or after 1 July 2017, for any other asset
17
acquired by the entity, if:
18
(a) the asset's start time is during the income year that includes
19
9 May 2017 or during an earlier income year; and
20
(b) no amount can be deducted under Division 40, or
21
Subdivision 328-D, of the Income Tax Assessment Act 1997
22
by the entity for the asset for the income year that includes
23
9 May 2017.
24
Vacancy fees for foreign acquisitions of residential land Schedule 3
Amendments Part 1
No. , 2017
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
11
Schedule 3--Vacancy fees for foreign
1
acquisitions of residential land
2
Part 1--Amendments
3
Foreign Acquisitions and Takeovers Act 1975
4
1 Section 4
5
Insert:
6
occupation day has the meaning given by section 115C.
7
residentially occupied has the meaning given by section 115C.
8
unpaid vacancy fees has the meaning given by section 115K.
9
unpaid vacancy penalties has the meaning given by section 115K.
10
vacancy fee has the meaning given by section 115C.
11
vacancy year has the meaning given by section 115C.
12
2 Subsection 100(1)
13
Repeal the subsection, substitute:
14
Provisions subject to an infringement notice
15
(1) The following provisions are subject to an infringement notice
16
under Part 5 of the Regulatory Powers Act:
17
(a) the provisions of Subdivision C of Division 3 (civil penalties
18
relating to residential land);
19
(b) subsection 115D(1) (vacancy fee liability--vacancy fee
20
return);
21
(c) subsection 115G(1) (vacancy fee liability--requirement to
22
keep records).
23
Note:
Part 5 of the Regulatory Powers Act creates a framework for using
24
infringement notices in relation to provisions.
25
3 At the end of subparagraph 100(5)(b)(iv)
26
Add:
27
Schedule 3 Vacancy fees for foreign acquisitions of residential land
Part 1 Amendments
12
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
No. , 2017
; (v) subsection 115D(1) (vacancy fee liability--vacancy fee
1
return);
2
(vi) subsection 115G(1) (vacancy fee liability--requirement to
3
keep records).
4
4 Part 6 (heading)
5
Repeal the heading, substitute:
6
Part 6--Fees in relation to actions
7
5 Subsection 113(5)
8
Omit "under this Act", substitute "under this section".
9
6 Section 115
10
Omit "under this Act", substitute "under section 113".
11
7 After Part 6
12
Insert:
13
Part 6A--Vacancy fees for foreign acquisitions of
14
residential land
15
Division 1--Simplified outline of this Part
16
115A Simplified outline of this Part
17
A vacancy fee is payable by a foreign person for any dwelling on
18
residential land, for any year (called a vacancy year), if the
19
dwelling is residentially occupied for less than 183 days in the
20
year.
21
A dwelling is residentially occupied on a day in any of the
22
following circumstances (or any combination of these
23
circumstances over the vacancy year):
24
(a)
the foreign person, or a relative of the foreign person,
25
genuinely occupies the dwelling as a residence (whether
26
or not with other persons);
27
Vacancy fees for foreign acquisitions of residential land Schedule 3
Amendments Part 1
No. , 2017
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
13
(b)
the dwelling is genuinely occupied as a residence under
1
a lease or licence with a term of 30 or more days;
2
(c)
the dwelling is genuinely available for occupation as a
3
residence under a lease or licence with a term of 30 or
4
more days.
5
The amount of the vacancy fee is found in the Foreign Acquisitions
6
and Takeovers Fees Imposition Act 2015. However, a vacancy fee
7
may be waived or remitted.
8
The foreign person is required to give a vacancy fee return to the
9
Commissioner of Taxation after the end of each vacancy year for a
10
dwelling. The person must also keep all relevant records for 5
11
years after disposal of the interest in residential land.
12
Unpaid vacancy fees for a dwelling may be recovered as a debt, or
13
by the creation of a charge over Australian land in which an
14
interest is held by the foreign person. The charge also secures any
15
unpaid penalties for contraventions of civil penalty provisions
16
under this Part relating to giving annual returns and keeping
17
records.
18
Division 2--Vacancy fees: liability
19
115B Scope of this Division--persons and land
20
(1) This Division applies in relation to a person if:
21
(a) the person is a foreign person; and
22
(b) the person acquires an interest in residential land on which
23
one or more dwellings are, or are to be, situated; and
24
(c) either:
25
(i) the acquisition is a notifiable action; or
26
(ii) the acquisition would be a notifiable action were it not
27
for section 49 (actions that are not notifiable actions--
28
exemption certificates).
29
Note:
Regulations made for the purposes of section 37 may provide for
30
circumstances in which this Division does not apply in relation to a
31
person or a dwelling.
32
Schedule 3 Vacancy fees for foreign acquisitions of residential land
Part 1 Amendments
14
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
No. , 2017
(2) The Commissioner of Taxation has the general administration of
1
this Part.
2
Note:
This Part is therefore a taxation law for the purposes of the Taxation
3
Administration Act 1953 (among other laws). That Act contains a wide
4
range of provisions about gathering, protecting and dealing with
5
information, the exercise of powers and the performance of functions,
6
under taxation laws, and the enforcement of taxation laws.
7
(3) However, the provisions of the Taxation Administration Act 1953
8
mentioned in subsection 138(2) of this Act do not apply in relation
9
to this Part.
10
115C Liability for vacancy fees
11
Main rule
12
(1) The person must pay a fee (a vacancy fee) in relation to each
13
dwelling on the land that is residentially occupied for fewer than
14
183 days during each vacancy year for the dwelling.
15
Note:
The amount of the vacancy fee is in Part 2 of the Foreign Acquisitions
16
and Takeovers Fees Imposition Act 2015.
17
Vacancy year
18
(2) A vacancy year, for a dwelling on the land, is the first, and each
19
successive, period of 12 months since the occupation day for the
20
dwelling during which the person has continuously held the
21
interest in land.
22
Occupation day
23
(3) The occupation day for a dwelling on the land is:
24
(a) if the dwelling is an established dwelling, unless
25
paragraph (c) applies--the first day the person acquires the
26
right to occupy the dwelling; or
27
(b) if the dwelling is a new dwelling, or the interest in the
28
dwelling acquired by the person is a near-new dwelling
29
interest (within the meaning of the Foreign Acquisitions and
30
Takeovers Regulation 2015), unless paragraph (c) applies--
31
the later of:
32
(i) the day on which a certificate of fitness for occupancy
33
or use (however described) is issued in relation to the
34
Vacancy fees for foreign acquisitions of residential land Schedule 3
Amendments Part 1
No. , 2017
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
15
dwelling for the purposes of the law of a State or
1
Territory relating to approvals of new dwellings; and
2
(ii) the first day the person acquires the right to occupy the
3
dwelling; or
4
(c) a day prescribed by regulations made for the purposes of this
5
paragraph.
6
Residential occupation
7
(4) A dwelling is residentially occupied on a day if:
8
(a) the person, or a relative of the person, genuinely occupies the
9
dwelling as a residence on that day (with or without any other
10
persons); or
11
(b) the dwelling is genuinely occupied on that day as a residence
12
under a lease or licence with a term of 30 or more days; or
13
(c) the dwelling is genuinely available on that day for occupation
14
as a residence under a lease or licence with a term of 30 or
15
more days.
16
115D Vacancy fee liability--vacancy fee return
17
(1) Within 30 days after the end of the vacancy year for a dwelling on
18
the land, the person must give a vacancy fee return to the
19
Commissioner of Taxation for the dwelling, in accordance with
20
subsection (2).
21
Civil penalty:
250 penalty units.
22
(2) The return must be in the approved form within the meaning of
23
section 388-50 in Schedule 1 to the Taxation Administration Act
24
1953.
25
(3) If the Commissioner of Taxation is satisfied that the person has
26
contravened subsection (1), the person is taken to be liable to pay a
27
vacancy fee in relation to the dwelling under section 115C
28
regardless of the number of days during the vacancy year on which
29
the dwelling is residentially occupied.
30
Note:
This section has no application to the person if the person has
31
disposed of his or her interest in the land before the end of the vacancy
32
year.
33
Schedule 3 Vacancy fees for foreign acquisitions of residential land
Part 1 Amendments
16
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
No. , 2017
115E Vacancy fee liability--notice of liability for vacancy fee
1
(1) The Treasurer or the Commissioner of Taxation must give written
2
notice to a person liable to pay a vacancy fee for a dwelling in
3
relation to a vacancy year of the amount of the fee, and the reasons
4
why the person is liable to pay the fee.
5
Note:
Section 25D of the Acts Interpretation Act 1901 sets out rules about
6
the contents of a statement of reasons.
7
(2) If the Treasurer decides to waive or remit all of the vacancy fee
8
under section 115H, reasons for the waiver or remission are not
9
required to be given under subsection (1).
10
(3) A notice given to a person by the Treasurer or the Commissioner of
11
Taxation under this section is prima facie evidence of the matters
12
stated in the notice.
13
115F Vacancy fee liability--due date
14
A vacancy fee for a dwelling becomes due for payment on a day
15
specified in the notice under section 115E, which must be at least
16
21 days after the notice is given to the person.
17
115G Vacancy fee liability--requirement to keep records
18
Main requirement
19
(1) The person must:
20
(a) keep records, in accordance with subsection (2), that record
21
and explain all transactions and other acts the person engages
22
in that are relevant to the person's liability for vacancy fees
23
for each dwelling on the land in each vacancy year for the
24
dwelling; and
25
(b) retain those records for at least 5 years after the end of each
26
such vacancy year.
27
Civil penalty:
250 penalty units.
28
Records in English
29
(2) The records must be in English, or readily accessible and easily
30
convertible into English.
31
Vacancy fees for foreign acquisitions of residential land Schedule 3
Amendments Part 1
No. , 2017
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
17
Exception
1
(3) This section does not require the person to retain a record if:
2
(a) the Commissioner of Taxation notifies the person that the
3
person does not need to retain the record; or
4
(b) the person is a company that has been finally dissolved.
5
115H Vacancy fee liability--waiver and remission
6
The Treasurer may, on behalf of the Commonwealth, waive or
7
remit the whole or a part of a vacancy fee if the Treasurer is
8
satisfied that it is not contrary to the national interest to waive or
9
remit the fee.
10
Division 3--Vacancy fees: recovery of unpaid fees
11
115J Vacancy fee recovery--as a debt
12
A vacancy fee may be recovered by the Treasurer or the
13
Commissioner of Taxation, on behalf of the Commonwealth, as a
14
debt due to the Commonwealth in a court of competent
15
jurisdiction.
16
115K Vacancy fee recovery--creation of charge over Australian
17
land
18
(1) This section applies in relation to Australian land in which a person
19
has an interest if:
20
(a) the person is liable to pay a vacancy fee under section 115C
21
in relation to that land or any other Australian land in which
22
the person holds an interest; and
23
(b) the vacancy fee is due for payment under section 115F, and
24
has not been paid; and
25
(c) the interest in Australian land can be registered on a land
26
register; and
27
(d) the Treasurer makes a declaration under section 115L that
28
this section applies in relation to the interest.
29
Note:
Subsection (4) contains an exception to this section (proceeds of crime
30
orders).
31
Schedule 3 Vacancy fees for foreign acquisitions of residential land
Part 1 Amendments
18
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
No. , 2017
Creation of charge
1
(2) A charge is created on the land to secure the payment of the
2
following amounts:
3
(a) amounts of vacancy fees (unpaid vacancy fees) that are due
4
for payment under section 115F, and have not been paid, in
5
relation to that land or any other interest in land held by the
6
person;
7
(b) any amounts of pecuniary penalties (unpaid vacancy
8
penalties) payable for contravention by the person of the
9
following provisions, if the amounts have not been paid:
10
(i) subsection 115D(1) (which deals with vacancy fee
11
returns);
12
(ii) subsection 115G(1) (which deals with the requirement
13
to keep records).
14
(3) The charge under subsection (2) is created at the time the
15
declaration under section 115L comes into force.
16
Exception in relation to proceeds of crime orders
17
(4) This section does not apply if at the time mentioned in
18
subsection (3):
19
(a) a restraining order is in force in relation to the land under
20
Part 2-1 of the Proceeds of Crime Act 2002; or
21
(b) a forfeiture order is in force in relation to the land under
22
Part 2-2 of that Act; or
23
(c) an order (however described) of a kind prescribed by the
24
regulations is in force in relation to the land under a law of
25
the Commonwealth, a State or a Territory.
26
115L Vacancy fee recovery--Treasurer's declaration relating to
27
charge over land
28
(1) The Treasurer may, by notifiable instrument, declare that
29
section 115K applies in relation to a specified interest in Australian
30
land held by a person if satisfied that the declaration is necessary to
31
secure the payment of:
32
(a) unpaid vacancy fees; and
33
(b) unpaid vacancy penalties (if any).
34
Vacancy fees for foreign acquisitions of residential land Schedule 3
Amendments Part 1
No. , 2017
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
19
(2) A declaration under subsection (1) must specify:
1
(a) the time the declaration is to come into force; and
2
(b) the Australian land to which section 115K applies.
3
115M Vacancy fee recovery--effect of charge on land
4
(1) A charge created on land under section 115K in which a person
5
holds an interest has priority over any other interest in the land
6
(even if the interest has been registered on a land register).
7
(2) The charge remains in force until all of the following amounts are
8
paid:
9
(a) any unpaid vacancy fees;
10
(b) any unpaid vacancy penalties;
11
(c) any costs incurred by the Commonwealth in relation to
12
recovering unpaid vacancy fees and any unpaid vacancy
13
penalties.
14
(3) To avoid doubt, the charge on the land is not affected by any
15
change in ownership of the land.
16
Powers of Treasurer
17
(4) The Treasurer has power, on behalf of the Commonwealth, to do,
18
or authorise the doing of, anything necessary or convenient to
19
obtain the registration of the charge on a land register.
20
(5) The Treasurer's powers under subsection (4) include:
21
(a) executing any instrument required to be executed; and
22
(b) signing any certificate that:
23
(i) states that a charge is created on land under
24
section 115K; and
25
(ii) specifies the land on which the charge is created.
26
115N Vacancy fee recovery--court order authorising vesting of
27
interest in Commonwealth
28
Court order
29
(1) The Treasurer or the Commissioner of Taxation may apply to a
30
court of competent jurisdiction for an order authorising the vesting
31
Schedule 3 Vacancy fees for foreign acquisitions of residential land
Part 1 Amendments
20
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
No. , 2017
of an interest in Australian land in the Commonwealth under
1
section 115P.
2
Note:
For service of notices or other documents relating to the application,
3
see section 135A.
4
(2) On application under subsection (1), a court may make the order
5
sought if:
6
(a) the Australian land is charged under section 115K to secure
7
the payment of unpaid vacancy fees and any unpaid vacancy
8
penalties; and
9
(b) the court is satisfied that it is necessary to make the order to
10
recover the amount of the unpaid vacancy fees and any
11
unpaid vacancy penalties; and
12
(c) the Australian land is not charged under section 104 (which
13
provides for the creation of charges to secure the payment of
14
pecuniary penalties for the contravention of civil penalty
15
provisions); and
16
(d) an order covered by subsection (3) is not in force in relation
17
to the land.
18
Exception in relation to proceeds of crime orders
19
(3) This section covers the following orders:
20
(a) a restraining order in force in relation to the Australian land
21
under Part 2-1 of the Proceeds of Crime Act 2002;
22
(b) a forfeiture order in force in relation to the land under
23
Part 2-2 of that Act;
24
(c) an order (however described) of a kind prescribed by the
25
regulations in force in relation to the land under a law of the
26
Commonwealth, a State or a Territory.
27
115P Vacancy fee recovery--vesting of interest in land
28
(1) This section applies in relation to a person's interest in Australian
29
land if:
30
(a) a court makes an order under section 115N authorising the
31
vesting of an interest in Australian land under this section;
32
and
33
(b) the interest is an estate in fee simple in the land or an interest
34
in a long term lease; and
35
(c) the person holds the interest alone.
36
Vacancy fees for foreign acquisitions of residential land Schedule 3
Amendments Part 1
No. , 2017
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
21
(2) When the order is made, or at a later time provided by the order:
1
(a) the interest in the land vests in equity in the Commonwealth
2
but does not vest in the Commonwealth at law until the
3
applicable registration requirements have been complied
4
with; and
5
(b) the Treasurer has power, on behalf of the Commonwealth, to
6
do anything necessary or convenient to give notice of, or
7
otherwise protect, the Commonwealth's equitable interest in
8
the land; and
9
(c) the Commonwealth is entitled to be registered on a land
10
register as the owner of that property; and
11
(d) the Treasurer has power, on behalf of the Commonwealth, to
12
do, or authorise the doing of, anything necessary or
13
convenient to obtain the registration of the Commonwealth as
14
the owner.
15
(3) The Treasurer's powers under paragraph (2)(d) include:
16
(a) executing any instrument required to be executed; and
17
(b) signing any certificate that:
18
(i) states that land has vested in the Commonwealth under
19
this section; and
20
(ii) specifies the land that has so vested.
21
115Q When the Commonwealth can begin dealing with interests in
22
land
23
(1) The Treasurer, and persons acting on the Commonwealth's behalf,
24
can dispose of, or otherwise deal with, a person's interest in
25
Australian land that vests under section 115P as authorised by a
26
court order under section 115N only after the later of the following
27
times:
28
(a) if the period provided for lodging an appeal against the order
29
has ended without such an appeal having been lodged--the
30
end of that period;
31
(b) if an appeal against the order has been lodged--the appeal
32
lapses or is finally determined.
33
(2) However, such disposals and dealings may occur earlier with the
34
leave of a court and in accordance with any directions of a court.
35
Schedule 3 Vacancy fees for foreign acquisitions of residential land
Part 1 Amendments
22
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
No. , 2017
115R Vacancy fee recovery--disposing of interests in land
1
(1) The Treasurer must, on behalf of the Commonwealth, dispose of an
2
interest in a person's (the owner's) land that vests in the
3
Commonwealth under section 115P as soon as practicable after the
4
time to which section 115Q applies.
5
(2) The Treasurer may give full and effective title to the land free of
6
all other interests, which are extinguished at the time title is given.
7
Dealing with the proceeds of sale
8
(3) The Treasurer must apply the proceeds of the disposal of the
9
interest in the land against:
10
(a) any unpaid vacancy fees the person remains liable to pay;
11
(b) any unpaid vacancy penalties the person remains liable to
12
pay;
13
(c) any costs incurred by the Commonwealth in relation to
14
recovering the unpaid vacancy fees and any unpaid vacancy
15
penalties; and
16
(d) any costs incurred by the Commonwealth in relation to the
17
disposal.
18
(4) The Treasurer must pay the remainder of the proceeds, if any, to
19
the persons mentioned in subsection (6) in the order in which they
20
appear in that subsection.
21
Note:
Not all of the persons mentioned in subsection (6) may be paid if the
22
proceeds are insufficient.
23
(5) If the remainder of the proceeds is insufficient to pay all of the
24
persons mentioned in paragraph (6)(a), the Treasurer must pay
25
each person mentioned in that paragraph proportionately.
26
(6) The persons are as follows:
27
(a) a person holding a mortgage, charge or other interest over the
28
land if the mortgage, charge or interest:
29
(i) relates to a debt due by the owner; and
30
(ii) has been registered on a land register;
31
(b) the Commonwealth in relation to any other penalty or debt
32
that is due and payable to the Commonwealth by the owner;
33
(c) the owner.
34
Vacancy fees for foreign acquisitions of residential land Schedule 3
Amendments Part 1
No. , 2017
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
23
(7) Nothing in this section affects the right of the Commonwealth to
1
recover debts or penalties by other means.
2
115S Vacancy fee recovery--exemption from stamp duty and other
3
State or Territory taxes and fees
4
No stamp duty or other tax or fee is payable under a law of a State
5
or a Territory in respect of the vesting of an interest in Australian
6
land under section 115P, or anything connected with the vesting of
7
the interest, if the Treasurer, by notifiable instrument:
8
(a) declares that the interest in the land has vested under that
9
section; and
10
(b) specifies the interest in the land.
11
115T Vacancy fee recovery--compensation for acquisition of
12
property
13
(1) If the operation of this Division would result in an acquisition of
14
property from a person otherwise than on just terms, the
15
Commonwealth is liable to pay a reasonable amount of
16
compensation to the person.
17
Note:
For the definitions of acquisition of property and just terms, see
18
section 4.
19
(2) If the Commonwealth and the person do not agree on the amount
20
of the compensation, the person may institute proceedings in a
21
court of competent jurisdiction for the recovery from the
22
Commonwealth of such reasonable amount of compensation as the
23
court determines.
24
8 After section 135
25
Insert:
26
135A Service of notices and other documents on persons who cannot
27
be found, or who are not in Australia
28
(1) This section applies if:
29
(a) a notice or other document, including (without limitation) a
30
document in respect of a proceeding to recover an amount of
31
a fee or penalty, needs to be served on a person for the
32
purposes of this Act; and
33
Schedule 3 Vacancy fees for foreign acquisitions of residential land
Part 1 Amendments
24
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
No. , 2017
(b) the Secretary, the Treasurer or the Commissioner of
1
Taxation, after making reasonable enquiries, is unable to find
2
the person, or is satisfied that the person is not in Australia.
3
(2) The Secretary, the Treasurer or the Commissioner of Taxation,
4
may, without the leave of a court, serve the document by posting it,
5
or a sealed copy of it, in a letter addressed to the person at any
6
address of the person in Australia or in a foreign country (including
7
the person's place of business or residence), or any electronic
8
address of the person (including a personal or business electronic
9
address of the person), that is last known to the Secretary,
10
Treasurer or Commissioner.
11
9 Subsection 138(2)
12
Repeal the subsection, substitute:
13
(2) However, the following provisions of Schedule 1 to the Taxation
14
Administration Act 1953 do not apply in relation to this Act:
15
(a) section 255-10 (to defer the payment time);
16
(b) Subdivision 255-D in that Schedule (security deposits);
17
(c) Part 4-25 (charges and penalties), other than section 288-35
18
and Division 298 to the extent that it relates to that section;
19
(d) Part 4-50 (release from particular liabilities);
20
(e) paragraph 355-15(c) (application of Division 355);
21
(f) Part 5-5 (rulings);
22
(g) Division 444 (obligations of entities on behalf of other
23
entities).
24
Taxation Administration Act 1953
25
10 After note 4 to subsection 250-10(2) in Schedule 1
26
Insert:
27
Note 5:
A liability for a fee that is due and payable under subsection 113(5) of
28
the Foreign Acquisitions and Takeovers Act 1975 is a tax-related
29
liability if the power of the Treasurer to recover the fee under that
30
subsection is delegated to the Commissioner of Taxation under
31
section 137 of that Act (see subsections 138(1) and (2) of that Act).
32
11 Subsection 250-10(2) in Schedule 1 (after table item 24CA)
33
Insert:
34
Vacancy fees for foreign acquisitions of residential land Schedule 3
Amendments Part 1
No. , 2017
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
25
24D
fee for an action that
does not relate to an
application or a notice
113(5)
Foreign Acquisitions and
Takeovers Act 1975 (but see note
5 to this subsection)
24E
vacancy fee
115F
Foreign Acquisitions and
Takeovers Act 1975
Schedule 3 Vacancy fees for foreign acquisitions of residential land
Part 2 Application of amendments
26
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
No. , 2017
Part 2--Application of amendments
1
12 Application of amendments relating to vacancy fees
2
(1)
The amendments of the Foreign Acquisitions and Takeovers Act 1975
3
in Part 1 of this Schedule apply in relation to an acquisition of
4
residential land by a foreign person if the acquisition is covered by
5
subitem (2).
6
(2)
This subitem covers an acquisition of residential land by a foreign
7
person if, after 7.30 pm on 9 May 2017:
8
(a) for an acquisition that is a notifiable action:
9
(i) the person gave notice of the action under section 81 of
10
that Act; or
11
(ii) the Treasurer made an order to which item 3 of
12
subsection 67(3) of that Act relates covering the
13
acquisition (directing that an interest in Australian land
14
may be acquired only to a specified extent); or
15
(iii) the Treasurer gave the person a no objection notification
16
under section 74 of that Act that covers the action; or
17
(b) for an acquisition that would be a notifiable action were it not
18
for section 49 of that Act (actions that are not notifiable
19
actions--exemption certificates)--an application is made for
20
any of the following exemption certificates covering the
21
acquisition:
22
(i) an exemption certificate under section 57 of that Act
23
(exemption certificates for new dwellings);
24
(ii) an exemption certificate under section 59 of that Act
25
(exemption certificates for established dwellings);
26
(iii) a residential land (near-new dwelling interests)
27
certificate within the meaning of the Foreign
28
Acquisitions and Takeovers Regulation 2015;
29
(iv) a residential land (other than established dwellings)
30
certificate within the meaning of that Regulation;
31
(v) any other exemption certificate prescribed for the
32
purposes of section 63 of that Act that relates to the
33
acquisition of residential land.
34
Vacancy fees for foreign acquisitions of residential land Schedule 3
Application of amendments Part 2
No. , 2017
Treasury Laws Amendment (Housing Tax Integrity) Bill 2017
27
(3)
The amendments apply in relation to an acquisition of land covered by
1
subitem (2) regardless of whether the land is acquired before or after
2
7.30 pm on 9 May 2017.
3