New rules applying soon for selling property

Don’t forget that new rules will soon apply to sales of taxable Australian real property with a market value of $2 million or more.

A 10% non-final withholding tax will be incurred for all contracts entered into on or after 1 July 2016, unless a clearance certificate or variation certificate is obtained.

If you are selling real property with a market value of $2 million or more and are:
an Australian resident vendor, you can avoid the 10% withholding by providing a clearance certificate to the purchaser prior to settlement
a foreign resident vendor, they may apply for a variation of the withholding.

You may claim a credit for the withholding amount paid to ATO against the final tax assessed in the vendor’s income tax return.

Purchasers must pay the amount withheld at settlement to ATO.