Foreign resident capital gains
The Federal Government has proposed to change the foreign resident capital gains withholding rate and threshold.
Currently, purchasers buying Australian real property where the contract price is $2 million or above must withhold 10% of the purchase price and provide this sum to the ATO, unless the vendor provides to the purchaser a clearance certificate issued by the ATO notifying the purchaser not to withhold foreign residency capital gains from the sale.
From 1 July 2017, the threshold will be lowered to real property where the contract price is $750,000 or above. Furthermore, the rate will increase to 12.5% of the purchase price.
If your sale or purchase is affected by foreign resident capital gains, we will let you know in our correspondence and advise you of the process required.