31 Jul Property over $750 000 needs ATO clearance certificate to avoid 12.5% tax

All vendors selling property over $750,000 are required to obtain an ATO Clearance Certificate
These new changes will apply to contracts entered into on or after 1 July 2017.

What are the upcoming changes?

From July 1, the FRCGW withholding tax rate increases to 12.5% from 10%. This applies to properties where the purchase price is $750,000 and above, where it previously applied to properties over the purchase price of $2 million.

The existing threshold and rate will apply for any contracts that are entered into before 1 July 2017, even if they are not due to settle until after 1 July 2017.

What you need to do to avoid the 12.5% tax:

Australian residents can avoid the 12.5% withholding tax rate by providing one of the following:

• When selling property over $750,000, you will need to obtain an ATO Clearance Certificate from the Australian Taxation Office and provide this to the purchaser prior to settlement,
• For other asset types, a vendor declaration is required to prove you are not a foreign resident.

If you would like to know more about this topic -take advantage of our free half hour legal consults. They can be done in person or via Skype or telephone conference. 

Call 03 8742 3199 or email info@rigolilawyers.com.au to make a booking and mentioning this article to claim your free booking.