Property Transactions – New Tax Rules for Properties $750,000.00 and Above – Effective 1 July 2017

Changes to the foreign resident capital gains withholding regime now require a purchaser to withhold 12.5% of the purchase price of real property valued at $750,000 or more and to pay that amount to the ATO on settlement unless the vendor obtains a clearance certificate.

The existing withholding threshold ($2 million) and rate (10%) will apply for any contracts that are entered into before 1 July 2017, even if they are not due to settle until after 1 July 2017.
Although the new laws are aimed at foreign residents, these new laws impact all property transactions valued at the applicable thresholds and over irrespective of whether the vendor is a foreign resident.

For more information see here.