Government expands reach of foreign resident CGT withholding regime
The changes are designed to increase the number of properties caught by the withholding regime
Changes to the capital gains tax withholding regime will impact all purchasers of real estate in Australia valued at over $750,000.
From 1 July 2017, a purchaser who acquires real property from a foreign resident vendor will be required to withhold 12.5% (up from 10%) of the purchase price of the property from the vendor and pay that amount to the Australian Taxation Office unless the property is valued at less than $750,000 (down from $2 million).
Australia has continued to be a significant destination for foreign investment, with the value of investment approved by the Foreign Investment Review Board rising to $248 billion in 2015 – 2016, predominantly driven by increased investment in real estate.
The changes are designed to increase the number of properties caught by the withholding regime to ensure the recovery of capital gains tax payable by foreign residents when disposing of assets in Australia. However, the practical implication of the changes is that any purchaser of real property within Australia valued at more than $750,000 to either:
- withhold a percentage of the purchase price from the vendor and remit that money to the ATO; or
- require the vendor to produce a clearance certificate confirming that it is not a foreign resident.
Reducing the threshold for exempt properties from $2 million to $750,000 means that from 1 July 2017 the majority of property transactions will be affected by this regime.
Victorian Government announces further extension to COVID-19 rent relief provisions
The State Government has announced that the protections for commercial tenants in place under the COVID-19 Omnibus...
HomeBuilder, FIRB and the Commercial Tenancy Relief Scheme update
By David Hartney & Athina McGregor
There has been some recent updates made to the HomeBuilder, FIRB and the Commercial Tenancy Relief scheme.