Extra duties and taxes do not apply to these properties.
Key information
Foreign purchaser additional duty and vacant residential land tax apply to residential property but not to commercial residential premises.
The short stay levy also does not apply to short stay bookings in commercial residential premises.
Commercial residential premises include:
- a hotel, motel, inn, hostel or boarding house
- premises used to provide accommodation in connection with a school
- a caravan park or a camping ground
- anything similar.
Whether a property is considered a commercial residential premises depends on its sole or primary use.
This definition is based on Commonwealth legislation.
Hotel, motel, inn, hostel or boarding house
These premises generally share these characteristics:
- They provide accommodation to several unrelated members of the public at the same time.
- They are run as a business.
- Providing accommodation is their main purpose.
- Staff take bookings, assign rooms, handle payments and offer other services.
- Guests are typically travellers who live elsewhere, as opposed to tenants.
Premises used to provide accommodation in connection with a school
A school is an institution that teaches:
- preschool
- primary
- secondary
- special education for students with disabilities.
This does not include higher education institutions like universities.
Universities and other tertiary institutions
Accommodation for higher education students is only sometimes considered commercial residential premises.
If the accommodation is provided in connection with a higher education institution, it is not commercial residential premises. This means foreign purchaser additional duty and vacant residential land tax may apply.
Examples include:
- residential accommodation owned and run by a university
- privately owned premises let to a university for student accommodation.
The ATO advises what makes this type of accommodation commercial residential premises or not. Factors include:
- location
- marketing
- the institution’s relationship with the accommodation provider.
