New CGT withholding requirements affecting more than just foreign resident vendors

What you need to know

• From 1 July 2016, buyers of Australian property valued at over $2 million from foreign residents will be required to withhold 10% of the purchase price and pay it to the Australian Tax Office (ATO).
• The presumption is that a seller is a foreign resident unless it proves otherwise by providing a clearance certificate from the ATO, or for certain assets a declaration.
• Where a buyer fails to withhold and remit it will be liable to the ATO for an equal to the amount that it was required to withhold and pay.

The Tax and Superannuation Laws Amendment (2015 Measures No. 6) Bill 2015 passed parliament and received Royal Assent on 25 February 2016 creating a new withholding regime. From 1 July 2016, buyers who enter into contracts with foreign resident sellers for the acquisition of Australian property assets valued at more than $2 million will be required to