New ATO rules on sales >750k

Just spotted this on Facebook. For Australian "residents"....so does that exclude Citizens?

https://www.ato.gov.au/FRWT_Certificate.aspx

From 1 July 2017, all Australian residents selling real estate for more than $750,000 will need to apply for a 'Clearance Certificate' from the ATO. It used to be more than $2,000,000 prior to Budget announcement.

The Vendor must attach this Certificate to the Sale Contract or serve it upon the Purchaser prior to completion.

If the Vendor does not do this, the Purchaser must withhold 12.5% of the Price and pay this to the ATO.

Clearance Certificates are valid for 12 months.

 

A oz citizen can be a non resident. You could reside in Singapore and lived here for the first two years of your life.

So no. Citizens are not excluded.

 

So Non-resident Australian citizens are exempt?

 

No

 

So a majority of people in Sydney... hell Mt Druitt hit $1.2m...

 

Do same rules apply if selling PPOR?

 

Yes

 

Jennifer Duke of Domain (who can also be found on PC) recently wrote a good article on the wide impact this tax will have. Especially on those who temporarily absent.
Australian expats caught up in federal government's 'foreign investor' rule changes

It applies to ALL property sales of $750K+ and requires one of two paths - A resident taxpayer can get a exemption certificate from the ATO (online) to exempt them. In some cases the resident taxpayer will be refused a certificate eg arrears of 2 years tax returns. For non-residents the withholding applies BUT if they can self assess a lesser rate the ATO will permit this.

Sound complex ? Yes. Its a broad anti-evasion rule. In some cases the process for applying for the relevant certificate may trigger a broader tax audit.

Strangely, the process for getting a clearance certificate does not involve identification of the property being sold. Bizarre really.

 

Waste of time. If you want to catch the cheats at least go all out and do it properly.

 

Yeah. Probably in next years budget.