From the 1st July, 2017 all sales of real property for $750,000.00 and above are now treated as sales by foreign residents for taxation purposes for the purpose of collection of a non- binding Foreign Resident Capital Gains Withholding Tax.
If the property is sold for $750,000.00 or above, you will need to obtain a clearance certificate from the Australian Taxation Office in order to avoid having the purchaser withhold 12.5% of the price on settlement.
This will apply to you if the property exceeds the threshold price, notwithstanding that you are not a foreign resident for taxation purposes and notwithstanding that the property is your principal residence and therefore not likely to be subject to Capital Gains Tax in the first instance.
A clearance certificate, once issued, is property specific and valid for 12 months. You are able to apply for the clearance certificate at any time and as such, if you are anticipating that the property will sell for $750,000.00 or above you may wish to make application for the certificate now.
More information on this tax can be obtained from the Australian Taxation Office website at www.ato.gov.au and the online application for the clearance certificate may be found at https://www.ato.gov.au/FRWT_Certificate.aspx
If you are unsure of your obligations or the information required to be set out in the application for the clearance certificate please seek advice from your accountant or tax specialist.
Please be aware that the clearance certificate must be issued before you can sign a contract of sale.
At Central Victoria Conveyancing, as Victorian farmers and former city dwellers, we understand all your Victorian country, suburban and city property concerns. We are with you all the way through your transaction, we are always available to discus any concerns or questions you may have in a friendly and easy to understand way with no unnecessary legal jargon.
Whether you are a first home buyer or looking to upsize or down size from your current home, a business looking to buy or sell, a developer looking to subdivide, an investor looking for your best options, or a farmer selling land ( we can help with water shares too), our team at Central Victoria Conveyancing can help you with advice and legal professional property services to suit your requirements and needs.
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