On 9 May 2017, the Government announced changes to the foreign resident capital gains withholding (FRCGW) rate and threshold. The changes will apply to contracts entered into on or after 1 July 2017:
- for real property disposals where the contract price is $750,000 and above.
- the FRCGW withholding tax rate will be 12.5%.
The existing threshold and rate will apply for any contracts that are entered into before 1 July 2017, even if they are not due to settle until after 1 July 2017.
Australian resident vendors selling real property will need to obtain a clearance certificate from the ATO prior to settlement, to ensure they don’t incur the 12.5% non-final withholding.
For more information please feel free to contact Tax Focus in Bondi Junction and one of our tax accountant specialists will be able to assist you.
