The Australian Government has introduced new rules to ensure foreign residents meet their capital gains tax liabilities. Essentially to ensure that capital gains tax is paid at the point of settlement and before residents or capital are overseas and/or unavailable.
From 1st July 2016 the new rule will apply to Australian residents buying or selling real property with a market value of $2,000,000 or more.
Under the new rules a property owner selling a property for above $2,000,000 is required to provide a Clearance Certificate to the buyer by settlement otherwise the buyer is required to withhold 10% of the sales price and pay this to the ATO.
Further information can be sourced from the ATO website https://www.ato.gov.au/media-centre/media-releases/new-tax-rules-for-property-sales-over-$2-million/ and https://www.ato.gov.au/General/Capital-gains-tax/In-detail/Calculating-a-capital-gain-or-loss/Foreign-resident-capital-gains-withholding-payments—common-questions/
If you are a Mount Barker or Adelaide Hills resident your Conveyancer or Solicitor should be able to assist you with the necessary documentation.
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