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We work collaboratively with our clients to build strong, sustainable relationships. Our team is committed to delivering consistent high standards of service, and we understand the importance of accessibility. Working with us, you'll enjoy open communication, meaning well scoped, properly resourced and effectively managed matters.

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Latest Case

Providing strategic advice on expansion structures November 16, 2018

Founded in Bondi Beach in 2012, Bailey Nelson has rapidly grown into a global eyewear retailer and service provider with boutiques in Australia, London, Canada and New Zealand. The strong demand for their products and … Continued

Latest News

Maddocks appoints leading energy and resources partner November 19, 2019

Tuesday 19 November 2019 Maddocks has appointed one of Australia’s leading energy and resources lawyers. Peter Limbers will be joining Maddocks as a partner in Sydney in early 2020. Peter is widely recognised as one … Continued

Latest Article

The Retail Leases Amendment Bill 2019 – ESMs, rent reviews and cooling off December 12, 2019

Since the issue of VCAT’s advisory opinion in May 2015 (Opinion), the retail leasing sector has been grappling with uncertainty about a landlord’s ability to recover from a tenant certain costs incurred in complying with … Continued

Non-final withholding tax regime

From 1 July 2016, changes will come into effect to Australia’s withholding tax rules that may require purchasers of Australian real property to withhold 10 percent of the purchase price, otherwise payable directly to the vendor, and pay this directly to the Australian Taxation Office (ATO). Broadly, the new withholding regime will:

  • apply where the vendor is a foreign resident, but will have practical implications for all Australian real property transactions with a market value of $2 million or greater
  • apply to all types of Australian real property transactions (residential, commercial, industrial, etc.)
  • apply in all states of Australia
  • not change any GST or duty calculations on acquisitions of Australian real property
  • also impact acquisitions of interests in landholding companies and trusts, and options to acquire Australian real property or interests in landholding companies and trusts.

If a purchaser fails to withhold and pay this amount to the ATO, penalties and interest can apply.

Implications for purchasers

For all acquisitions of Australian real property with market value of $2 million or greater, purchasers will need to obtain a clearance certificate from the vendor confirming the vendor’s status as an Australian resident for tax purposes. If a clearance certificate is not obtained, purchasers will be required to withhold 10 percent of the purchase price and pay this directly to the ATO. 

Implications for vendors

Australian resident vendors of Australian real property with market value of $2 million or greater will need to apply online for a clearance certificate confirming their status as an Australian resident for tax purposes. The ATO will be automating this process and expects clearance certificates to be issued within 1 – 14 days in straightforward cases, with a longer processing time for more unusual or higher risk cases. Clearance certificates can also be obtained in anticipation of a transaction (even prior to listing a property for sale) and will be valid for 12 months.

If no clearance certificate is provided, the purchaser is required (by default) to withhold 10 percent of the purchase price, meaning the vendor will only receive 90 percent of the purchase price. The withheld amount is effectively a ‘prepayment’ of tax and a credit for the amount withheld (and paid to the ATO) is able to be claimed in the vendor’s income tax return.

Should you wish to discuss any aspect of the new withholding regime, please contact a member of our Tax and Revenue team.

From 1 July 2016, changes will come into effect to Australia’s withholding tax rules that may require purchasers of Australian real property to withhold 10 percent of the purchase price, otherwise payable directly to the vendor, and pay this directly to the Australian Taxation Office (ATO). Broadly, the new withholding regime will:

  • apply where the vendor is a foreign resident, but will have practical implications for all Australian real property transactions with a market value of $2 million or greater
  • apply to all types of Australian real property transactions (residential, commercial, industrial, etc.)
  • apply in all states of Australia
  • not change any GST or duty calculations on acquisitions of Australian real property
  • also impact acquisitions of interests in landholding companies and trusts, and options to acquire Australian real property or interests in landholding companies and trusts.

If a purchaser fails to withhold and pay this amount to the ATO, penalties and interest can apply.

Implications for purchasers

For all acquisitions of Australian real property with market value of $2 million or greater, purchasers will need to obtain a clearance certificate from the vendor confirming the vendor’s status as an Australian resident for tax purposes. If a clearance certificate is not obtained, purchasers will be required to withhold 10 percent of the purchase price and pay this directly to the ATO. 

Implications for vendors

Australian resident vendors of Australian real property with market value of $2 million or greater will need to apply online for a clearance certificate confirming their status as an Australian resident for tax purposes. The ATO will be automating this process and expects clearance certificates to be issued within 1 – 14 days in straightforward cases, with a longer processing time for more unusual or higher risk cases. Clearance certificates can also be obtained in anticipation of a transaction (even prior to listing a property for sale) and will be valid for 12 months.

If no clearance certificate is provided, the purchaser is required (by default) to withhold 10 percent of the purchase price, meaning the vendor will only receive 90 percent of the purchase price. The withheld amount is effectively a ‘prepayment’ of tax and a credit for the amount withheld (and paid to the ATO) is able to be claimed in the vendor’s income tax return.

Should you wish to discuss any aspect of the new withholding regime, please contact a member of our Tax and Revenue team.