Recent legislative amendments are designed to ensure foreign
residents are liable to pay tax on capital gains on certain real
estate transactions.
The amendments impose a 10% tax withholding requirement on
Australian real property valued at over $2 million
that is purchased from non-resident vendors for contracts entered
into from 1 July 2016.
The legislative amendments are drafted on the basis that the
vendor is a non resident which means that resident vendors may be
required to obtain a clearance certificate from the tax
commissioner to escape the 10% withholding by the purchaser.
The Act introduces a new regime imposing withholding obligations
on the purchasers of certain Australian real property transactions
and is designed to assist in the collection of the capital gains
tax ("CGT") liabilities of foreign
residents.
