A recent change to the Foreign Resident Witholding Tax law has significant implications beyond foreign investors.

From July 1 2017 ALL sellers who expect their property to sell for more than $750,000 (applies to most sellers in the suburbs we look after) must seek a clearance certificate from the ATO as soon as possible after deciding to list their property for sale to avoid any delays to settlement.

These changes, which will apply to contracts entered into, on, or after 1 July 2017, will affect many homeowners.

So what are the changes?

• The relevant threshold for contracts has now been reduced from $2,000,000 to $750,000.
• The withholding tax rate has been increased from 10% to 12.5%.

What do I need to do?

If you are selling a property for more than $750,000 you will need to seek a clearance certificate from the ATO as soon as possible to avoid any delays to settlement.

Without this certificate, 12.5% of the sale proceeds will be paid directly to the ATO on settlement.

How do I apply for a clearance certificate?

You can apply for the certificate in one of two ways – via your accountant or lodge an online application directly via the ATO website.