New laws hit high mar­ket

ATO ups clear­ance money

Whitsunday Times - - ADVERTISING FEATURE -

NEW prop­erty in­vest­ment laws have come into place as of July 1.

Ray White Whit­sun­day prin­ci­pal Mark Beale said while the new for­eign in­vest­ment laws would only af­fect be­tween 5–10% of the Whit­sun­day prop­erty mar­ket, it was still some­thing buy­ers and sell­ers need to be aware.

Pre­vi­ously, any house sold for more than $2 mil­lion needed to have 10% of its pur­chase price tem­po­rar­ily placed in a trust ac­count and sent to the Aus­tralian Tax­a­tion Of­fice un­til the buyer re­ceived a clear­ance.

“They’ve re­duced it to $750,000 and 12.5% of the pur­chase price, which has changed it dra­mat­i­cally,” Mr Beale said.

“Ef­fec­tively it makes agents and solic­i­tors agents for the tax of­fice and it cre­ates ex­tra pa­per work and costs if you’re a buyer or seller.

“Ev­ery minute your so­lic­i­tor works on some­thing they’re charg­ing you for it, so it’s go­ing to be cost­ing peo­ple more money in the end.”

Mr Beale said that with a me­dian home mar­ket price of $440,000, the new laws would not af­fect the Whit­sun­day mar­ket as much as other places but it would still be some­thing that needed con­sid­er­a­tion.

“The story six to 12 months ago in Syd­ney, in par­tic­u­lar at the har­bour front, was over­seas in­vestors buy­ing prop­er­ties the same as Aus­tralian res­i­dents or ci­ti­zens but they weren’t al­lowed to and it caused prob­lems,” he said.

“The gov­ern­ment needs to know how many for­eign­ers are buy­ing Aus­tralian prop­er­ties.

“(For ex­am­ple) in the 1980s on the Gold Coast, a lot of Ja­panese buy­ers came in and bought vir­tu­ally the whole main street.”

Mr Beale said peo­ple would need to be more pre­pared by ac­quir­ing a clear­ance cer­tifi­cate from the ATO that says they’re an Aus­tralian cit­i­zen to re­trieve the money from the tax of­fice. The with­held money will be re­turned once the per­son is cleared.

“If they’re a for­eigner, they have to ap­ply for a visa un­der the For­eign In­vest­ment Re­view Board,” he said.

“It prob­a­bly won’t have that much of an im­pact lo­cally but peo­ple do need to be aware they need that clear­ance cer­tifi­cate be­fore they go to mar­ket.

“I think the tax of­fice is prob­a­bly go­ing to be in­un­dated.

In Syd­ney al­most ev­ery prop­erty is over $750,000 within a cer­tain area.”

Mr Beale said with the new process they were un­sure how long peo­ple’s money would be with­held.

PHOTO: CON­TRIB­UTED

CHANGES: Un­der new tax laws about $2.125 mil­lion of the $17 mil­lion price tag for Air­lie Beach’s Man­dalay House would have to go to the ATO tem­po­rar­ily.

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