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Changes to Withholding Payments

Changes to Withholding Payments

, Buying, Investment Properties, Finance

Foreign Resident Capital Gains Withholding Payments - Impacts on Foreign and Australian Residents                                         .

Effective 1 July 2017 Foreign Resident Capital Withholding (FRCGW) Clearance Certificates are now needed for properties that sell with a contract price of $750,000 or more (previously $2M)

WHAT ARE THE UPCOMING CHANGES?

From July 1, the FRCGW rate increases to 12.5% from 10%. This applies to properties where the purchase price is $750,000 and above, where it previously applied to properties over the purchase price of $2M or more.

WHAT YOU NEED TO DO TO AVOID THE 12.5% WITHOLDING:

Australian residents can avoid the 12.5% FRCGW by providing one of the following:
1.When selling a property for $750,000 or more, obtain a Clearance Certificate from the Australian Taxation Office (ATO) and provide this to your solicitor prior to settlement to avoid the purchaser retaining 12.5% of the purchase price and remitting it to the ATO; and
2. You might consider obtaining the certificates from the ATO for all your entities that are selling properties in the coming months (the certificates remain current for 12 months).Talk to your accountant who can obtain these certificates on line from the ATO.

 

For more information click HERE.

REF: ATO

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28.08.2017
Renting, Buying, Selling, Local News, Finance
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