Are you Selling a Property over $750,000

Tuesday, 25 July 2017   

Are you Selling a Property over $750,000
Vendors selling properties over $750,000 will need to show they are an Australian resident by obtaining a Clearance Certificate  and proving they are not a Foreign Resident from 1 July 2017. 
If a Clearance Certificate is not obtained prior to settlement and provided to the purchaser,  a 12.5% withholding tax will be deducted from your settlement funds.
 
What Property is Included ?
The Legislation applies for the following asset types:
1. Taxable Australian Property with a market value of $750,000 or more including vacant land, buildings, residential and commercial property.
2. Watch share holdings and Options
 
When Should you apply ?

Australian Residents:
  • If your property is likely to sell for more than $750,000 then you should apply as soon as possible with putting the property on the market to avoid the 12.5% of the purchase price being withheld at settlement.
  • If you are using an Auction campaign or Expression of Interest method of selling your property and are unsure of the final purchase price you should apply for a Clearance Certificate from the ATO as soon as possible.
 
Foreign residents
  • Foreign Resident vendors will have the 12.5% withheld at settlement by the purchaser and provided to the ATO. Determining if you are a foreign resident for taxation purposes is complex and assessed on an individual basis.

What if a Clearance Certificate  is not provided and the Tax is Withheld ?
Australian residents who have the Tax withheld from settlement proceeds will be able to claim a credit for the amount  when they lodge their next tax return. 
Clearance Certificates can take up to 14 days from the ATO.
 
 Avoid the Tax and talk to our team of Property experts today: Telephone Butlers Accountants on 07 5536 2288 .