A letter from the ATO saying you have breached Australia’s foreign investment rules usually comes with two deadlines. One is a short deadline, often about two weeks, to provide information. The other is a later due date to pay an infringement notice. What you do in those first two weeks often decides how the matter ends.
The letters you may receive
- An information request. The ATO explains the breach it has found and asks for documents and explanations by a set date.
- An infringement notice. This sets out the alleged contravention, the penalty tier and the amount, with a separate due date for payment.
They often arrive on the same day, sometimes posted to your overseas address. Read both in full. The dates in them don’t move unless you ask for an extension in time.
Step 1: Put both deadlines in your calendar
Write down the response date and the payment date. If you need more time, ask for it before the date passes. A request to extend the time to pay an infringement notice is not accepted after the due date.
Step 2: Decide who will speak for you
The ATO will only discuss your case with you or an authorised representative. If a lawyer or other adviser will handle it, sign a written authority early. This matters most if you live overseas, are in a different time zone, or are not comfortable in English.
Step 3: Gather the documents the ATO usually asks for
- your FIRB approval or exemption certificate and the contract of sale
- every visa grant notice, plus details of any visa applications still being decided
- a list of every address where you have lived since the approval, with dates
- how the property has been used since you bought it: lived in, rented, lent to family or empty
- any leases or tenancy agreements
- any other Australian property you own or hold an interest in
- your current phone, email, residential and postal addresses
Step 4: Check the ATO’s facts
The ATO’s finding relies on the records it holds, and they can be incomplete. Check carefully:
- Your visa history. A later visa grant, or a permanent visa application with a bridging visa, may mean you were still a temporary resident.
- The dates. The six-month period runs from the day your status or use of the home changed. Check that the ATO has it right.
- Ownership. Joint owners, a spouse who is an Australian citizen or permanent resident, or a sale already under way may all be relevant.
Step 5: Think before you write
Your answers are evidence. A frank answer about how the property was used may disclose another breach, such as renting out a home approved only as a residence, or missed vacancy fee returns. Voluntarily disclosing other breaches can reduce the penalty for them, so the right approach is usually a complete and carefully framed response. A hasty email is not.
Step 6: Understand your payment options
- Pay by the due date. Payment discharges liability for that contravention and is not an admission of guilt. It doesn’t end the breach if you still hold the property.
- Ask for more time to pay. Apply before the due date.
- Seek withdrawal. You must make a written representation explaining why the notice should be withdrawn, and you must still pay. Withdrawal is granted only in extenuating circumstances, and the decision is final within the ATO. Review is limited to judicial review in the Federal Court.
- Don’t pay. The ATO may then go to court for a pecuniary penalty order, which can be far larger.
Step 7: Fix the breach
If the condition is to sell, the ATO will expect a sale. Line up an agent and a conveyancer early. When selling as a foreign resident:
- the buyer must withhold 15% of the price under the foreign resident capital gains withholding rules unless you provide an ATO clearance certificate, so apply for one if it applies to you
- foreign residents generally cannot claim the main residence capital gains tax exemption, so speak with your accountant about the tax before you sign
- check whether you need to notify the State Revenue Office of absentee owner status or vacancy
If you have a real reason to need more time, a variation application or a request to the case officer may be possible. The ATO will look more favourably on an owner who is clearly working towards compliance.
How we can help
Chua Tan Associates acts for property owners in Australia and overseas dealing with ATO foreign investment reviews. We prepare authorities and responses, deal with the case officer, request extensions and coordinate the sale or restructure. We work in English, Mandarin and Cantonese and can meet online across time zones. If a letter has arrived, contact us as soon as you can. The first deadline is usually close.
This article is general information only and is not legal advice. The law and ATO practice change regularly. It is current as at October 2026.
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Book a consultationImportant: This article is general information only and must not be relied on. It is not legal, tax or financial advice, does not take your circumstances into account, and may not reflect changes in the law after publication. Laws of other countries may also apply. Do not act or refrain from acting on the basis of this article. Reading it or contacting us does not create a lawyer–client relationship. Please book a consultation for advice on your situation.
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