Conveyancer's guide to new ATO requirements

From 1 July 2016, new rules apply to sales of taxable Australian property with a market value of $2 million or more. The purchaser must deduct 10% from the purchase price and pay that amount to the ATO unless the seller presents a tax ‘clearance certificate’. Conveyancers will be directly involved in these transactions, so the ATO has issued a Guide for Conveyancers to help.

Taxable Australian property includes vacant land, buildings, residential and commercial property, so this is one for prospective buyers, sellers, agents and solicitors to be aware of.

The obligation to withhold only arises if the vendor is a relevant foreign resident for the purposes of this measure. Australian resident vendors selling such property, will need to obtain a clearance certificate from the ATO prior to settlement to avoid the 10% withholding tax.  Where a clearance certificate is provided, the purchaser is not required to withhold an amount from the purchase price.

If you would like to discuss these changes in more detail or require further information, please contact the team at Maxim, we're here to help!

 

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