Be aware! New tax rules for $2m+ property sales

 In Newsletter

sydney buyers agentsIt’s important to note that from 1 July 2016 Australian residents selling real estate with a market value of $2 million or more will now need to apply for a clearance certificate from the Australian Taxation Office (ATO) to ensure amounts are not withheld from the sale proceeds. Where a valid clearance certificate isn’t provided by settlement, the purchaser is then required to withhold 10% of the purchase price and pay this to the ATO.

This is all part of the Australian government’s crackdown on foreign residents, with the rules introduced to ensure foreign residents meet their capital gains tax liabilities. Amounts withheld will be credited against their final income tax liability assessed on foreign residents’ income tax returns.

Clearance certificates are valid for 12 months from issue, and must be valid at the time it is made available to the buyer. Penalties apply where sellers make false or misleading declarations to the ATO, or where the buyer fails to withhold when they should. According to the ATO website, the form is available to download easily online, and there is no fee for clearance certificate applications.

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