NEW ATO CLEARANCE CERTIFICATES FOR SALES ABOVE $750,000

Any contracts entered into on or after the 1st of July 2017 nominating a sale price of $750 000 or greater, will require the seller to obtain an ATO clearance certificate prior to settlement to prove they’re not a foreign resident.

If the ATO Clearance certificate is not obtained by settlement then 12.5% of the purchase price will need to be retained by the buyers solicitors at settlement and remitted to the ATO immediately following settlement.

If the seller is a foreign person for tax purposes then it is very likely that they will not be able to obtain the clearance certificate (which means there will be a retention of 12.5% at settlement), but we recommend seek advice regarding this from your tax accountant as soon as the property is listed for sale.
WHAT DO YOU NEED TO DO AS A SELLER?

When you discover the date of your settlement, this should be your trigger to commence the process and lodge the application as early as possible so you don’t get stuck at settlement.

Have your tax file number ready and go to the ATO website:  Online clearance certificate application for Australian residents

Most sellers will be able to obtain this certificate by logging on to the ATO website. If there are two or more sellers each of them will have to obtain a clearance certificate. Please consult your accountant if you are a company.

This new law is designed to prevent foreign residents from selling property in Australia and returning to their original country without paying the Capital Gains tax.

If you have any questions please seek advice from your accountant or solicitor.

 

Sunshine Coast Property News
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NEW ATO CLEARANCE CERTIFICATES FOR SALES ABOVE $750,000