New rules for selling property over $2 million
A 10% non-final withholding tax may be applied to all contracts to sell such property entered into on or after 1 July 2016.
Australian resident vendors selling such property will need to obtain a clearance certificate from the ATO prior to settlement to avoid the 10% non-final withholding tax.
This new 10% withholding tax was really only intended to apply to non-residents selling Australian property.
However, it equally applies to Australian resident vendors and forces them to obtain a clearance certificate from the ATO to, in fact, prove that they are Australian residents.
Generally speaking, clients will be affected for sales of residential and commercial properties, or companies or trusts that hold such properties.
Please contact us on 02 9318 6400 if you would like to discuss.