Buying Property worth $2m +

There has been much talk of the new non-resident withholding tax when a non-resident disposes of Australian property.

The law is now with us and it has a nasty sting. It actually does not just apply when a non-resident sells property. It applies to ALL direct real property or indirect property ownership (of 10%+) and applies to all land sales and some leases of land even by a resident taxpayer.

So what does this mean ?

The BUYER of the property has a legal obligation to withhold the 10% taxfrom the proceeds at settlement if the seller does not provide a clearance certificate. A clearance certificate is automatically issued where the vendor is a Australian resident so it follows the lawyer / conveyancer settling the property will make demands of the vendor. However where the vendor is unco-operative, lazy or blatantly refuses then the buyer may have a obligation to withhold even if the vendor is an indigenous or first fleet Australian.

And the onus for collecting this tax rests with the buyer.

I can see a spike in CGT audits with the ATO holding sales data for all properties at $2m+

 

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