New withholding obligations for Australian real estate

The new Foreign Resident Capital Gains Withholding (FRCGW) regime commenced on 1 July 2016 and imposes withholding obligations on purchasers of certain assets which are classified as Taxable Australian Property (TAP). TAP includes direct interests in land, leases and mining rights and indirect interests in Australian real property such as shares in certain companies that own TAP. The FRCGW regime is aimed at improving the collection of tax liabilities from foreign residents when they have disposed of Australian assets. It is important to note that these rules place the responsibility of withholding and payment of the tax on the purchaser.

In relation to real property transfers for more than $2 million, a purchaser is required to remit 10% of the purchase price to the ATO. Importantly, the rules assume that all vendors are foreign residents unless a clearance certificate or vendor declaration has been provided to the purchaser.

If you are involved in a real estate transaction in excess of the $2 million threshold, Roberts & Morrow can assist in advising on your withholding obligations (for purchasers) or obtaining the necessary clearance certificate or declaration (for vendors).

Recent Articles

Proposed broadening of NSW Landholder Duty

02nd December 2019

Landholder duty only applies to relevant acquisitions of shares in companies or units in unit trusts that hold interests... Read More

Discretionary trusts – Take action now to avoid extra land tax and stamp duty charges!

22nd November 2019

In NSW the extra 8% stamp duty and extra 2% land tax surcharges for foreign persons, trusts and companies... Read More

Update on drought assistance

21st November 2019

The NSW Government Department of Primary Industries shares regular updates on drought assistance initiatives as they become available. Click... Read More

We've got an app!

21st November 2019

Roberts & Morrow has launched an app available for download from the App Store for the iPhone/iPad or from... Read More