Last week I attended the CPA Public Practice conference and one item of interest was the Foreign Resident Capital Gains Withholding. Basically it applies to sales of Australian Real Estate with a market value of $2 million or more, where the contract is entered into on or after 01/07/16. So many of these contracts will be being drafted or negotiated now.
The legislation imposes an obligation on purchasers to withhold 10% of the purchase price and pay it to the ATO. Notice that? The obligation is on the purchaser to withhold because of a possible capital gain incurred by the vendor.
So if you know of anyone looking to purchase real estate at $2 million or over, or anyone involved in drafting or negotiating contracts, please pass this information on to them.
For full details, look at the ATO’s website: https://www.ato.gov.au/general/capital-gains-tax/in-detail/calculating-a-capital-gain-or-loss/foreign-resident-capital-gains-withholding/
