You may (or may not) recall, in the May 2013 Budget, the government announced that it wanted to introduce a 10% non-final withholding tax for foreign residents who sell Australian property above a certain threshold. Well, this legislation was passed in February 2016 and comes into effect from 1 July 2016. But I can hear you thinking ‘what impact will this have on me?’.
From 1 July, if you are an Australian resident who sells a property with a market value of $2 million or more you need to obtain a clearance certificate from the ATO, otherwise the seller is obligated to withhold 10% of the purchase price and pay it to the ATO.
This works vice versa – if you are the seller and the purchaser does not provide you with a clearance certificate from the ATO, you are required to withhold 10% of the purchase price and pay it to the ATO.
Confused? Hopefully your conveyancer and real estate agent have a handle on it. But if you need further information, the ATO website has further information. Or alternatively, feel free to contact our office and we can assist you.