Ellenbrook Advocate - - RESIDENTIAL -

HOME­OWN­ERS of­fer­ing prop­er­ties for sale above $750,000 will have to ob­tain a clear­ance cer­tifi­cate from the Aus­tralian Tax­a­tion Of­fice from July 1 to prove they are not for­eign res­i­dents.

New changes to the cap­i­tal gains tax for for­eign res­i­dents, which were an­nounced in last month’s Fed­eral Bud­get, will also see the with­hold­ing rate in­creased to 12.5 per cent.

At present, only prop­er­ties above $2 mil­lion are li­able for the for­eign res­i­dent cap­i­tal gains with­hold­ing tax, which is 10 per cent.

Bourkes prin­ci­pal Alan Bourke said with the prop­erty thresh­old low­ered from $2 mil­lion to $750,000, more home­own­ers than ever would be bur­dened with the ad­min­is­tra­tive process.

“We are about to see one of the great­est changes to real es­tate trans­ac­tions for many, many years,” Mr Bourke said.

“In the lat­est bud­get, Trea­surer Scott Mor­ri­son an­nounced that for­eign res­i­dents with prop­er­ties sold above $750,000 would be re­quired to ob­tain a clear­ance cer­tifi­cate be­fore they sold their home.

“In the fine print, all Aus­tralian res­i­dents are the ones who are re­quired to get a cer­tifi­cate be­fore they sell their home if it’s worth more than $750,000.

“The prob­lem is that in the bud­get, the ter­mi­nol­ogy used is ‘non­res­i­dents’ Alan Bourke. and no one thinks it re­lates to Aus­tralian res­i­dents; it is poorly named.”

The ex­ist­ing with­hold­ing leg­is­la­tion is in place to as­sist the ATO with the col­lec­tion of for­eign res­i­dents’ Aus­tralian tax li­a­bil­i­ties.

It im­poses an obli­ga­tion on pur­chasers to with­hold a per­cent­age of the pur­chase price and pay the sum to the ATO.

Aus­tralian res­i­dent sellers who want to avoid los­ing the pro­ceeds of their prop­erty sale to the ATO are re­quired to ob­tain the clear­ance cer­tifi­cate.

With­out a clear­ance cer­tifi­cate and at the min­i­mum sale price of $750,000, a seller would see $93,750 with­held by the ATO.

Clear­ance cer­tifi­cate ap­pli­ca­tions are avail­able on­line on the ATO web­site.

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