Not many seems to be aware of this new law. Is it applicable to all vendors with properties sold over $750k regardless of the residency? From what i gathered from ATO enquiry line, that's the case but on some wordings in ATO website, it applies to all foreigner as well? Anyone can advise?
You should spell out what it means Foreign Residents Capital Gains Withholding. It applies to non-residents which is different to 'foreigners' Foreign resident capital gains withholding payments
If you are a non-resident and selling consider getting a variation: Capital gains withholding: Impacts on foreign and Australian residents No point the ATO getting the full 12.5% and having to wait until the end of the tax year to claim some or all of it back.
Apparently, i think its applicable to Aus resident as well? Vendor beware: Home sales above $750K require proof that seller is not a foreign investor
The withholding affects ALL eligible property sales of $750K or more that are subject to these laws. (resi premises, company titles, land for future housing etc). Some sales may be exempted. eg some existing OTP contracts just being settled. The solicitor advising your property sale / purchase should advise. In its simplest form a tax resident completes an online form with the ATO and is exempted. Each owner must do this. No withholding occurs. However if they have tax arrears etc they may be refused a certificate. If they fail to correctly get a clearance certificate withholding occurs by default. They can lodge a tax return (even for a CGT exempt home sale) and claim the refund of the tax. A non-resident cannot apply. A tax non-resident will have withholding imposed (incl citizens, expats and others). They should lodge a tax return to get credit for the withholding and refund of any excessive tax v's final CGT. They cannot seek exemption. Capital gains withholding: Impacts on foreign and Australian residents
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