New Rules 1 July Buying Property from a Non Resident

The ATO are reminding taxpayers that new rules applying to the sale of Australian real property with a market value of $2 million or above commence from Friday 1 July.

In particular, Australian residents will need to obtain a clearance certificate from the ATO prior to settlement to avoid the 10 per cent non-final withholding tax. Foreign resident vendors may apply for a variation to the 10 per cent withholding tax prior to the sale of property.

 

These new rules apply to ALL properties sold for $2m +. Where a resident is the vendor its a little easier but still a compliance issue. A resident must still obtain a certificate - An avoidance measure of course.

The methodology and forms can be accessed here :
Foreign resident capital gains withholding payments | Australian Taxation Office

I suspect for resident vendors the real estate agents will want to ensure that vendors apply for the clearance certificate early ie when listing the property etc so that withholding doesnt apply due to overlooking the process. It appears straight forward.