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New Rules 1 July Buying Property from a Non Resident

Discussion in 'Accounting & Tax' started by MikeLivingTheDream, 16th Jun, 2016.

  1. MikeLivingTheDream

    MikeLivingTheDream BCOM MCOM MTAX CPA CTA Registered Tax Agent

    Joined:
    24th Jun, 2015
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    Location:
    Philippines
    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.
     
  2. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

    Joined:
    18th Jun, 2015
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    Location:
    Sydney
    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.
     
    Last edited: 17th Jun, 2016