Last year, the Australian Taxation Office (ATO) introduced new requirements to assist with the collection of Foreign Resident’s tax liabilities.
This latest change impacts all Sale Contracts where the purchase price is $750,000 or more, regardless of whether you are a Foreign or an Australian Resident.
All Vendors selling their property will need to apply for a Clearance Certificate from the ATO to ensure withholding payments are not withheld from their sale proceeds.
If you sell your property for $750,000 or more, and you do not provide the Purchaser with this Clearance Certificate prior to settlement, then the Purchaser is required by law to deduct 12.5% from the purchase price and remit it to the ATO. Once the funds are remitted to the ATO you will need to apply for an assessment and refund. This will mean significant delays to you in receiving the full sale proceeds for the property.
As your conveyancer we will assist you in applying for this Clearance Certificate as part of our conveyancing services.