Buying or selling a property
Contact White Jordin prior to signing your contract for free advice.
Buying or selling a property is often a major event in your life. It can be an exciting time, but when you’re faced with inspections, contracts and settlement arrangements it can become very difficult and stressful. We provide a completely comprehensive conveyancing service that eases all the stress and strain!
Buying or Selling? New rules may apply!
Existing legislation assists with the collection of tax liabilities for Foreign residents, and imposes an obligation on the Buyer to retain 12.5% of the Purchase Price at settlement and pay it to ATO.
New rules pertaining to Foreign Resident Capital Gains withholding have come into effect and relate to Foreign and Australian residents disposing of certain taxable property under Contracts entered into from 1 July 2017, and apply to real property disposals where the Purchase Price is $750,000.00 or more.
What effect does this have
on selling property?
If you are selling, and anticipate a sale price of $750,000.00 or over, this legislation applies to you.
Australian resident Vendors are now required to obtain a Clearance Certificate prior to settlement to prove that they are not a foreign resident. If a Clearance Certificate is not obtained, the Buyer is required to withhold 12.5% of the Purchase Price at settlement.
The new legislation applies to taxable Australian property with a market value of $750,000.00 or more, including vacant land, buildings, residential and commercial property.
This legislation applies to the following assets:
- Taxable Australian real property with a market value of $750,000.00 or more;
- Vacant land, buildings, residential and commercial property;
- Mining, quarry or prospecting rights where the material is situated in Australia;
- A Lease over real property;
- Indirect Australian real property interests in Australian entities (whose majority of assets consist of the above asset types);
- Options or rights to acquire any of the above asset types.
It is important to note:
An entity may apply for a Clearance Certificate at any time when considering disposing of taxable Australian property
All parties listed on a Certificate of Title are required to complete individual applications
Australian residents not required to complete Income Tax Returns are still required to obtain a Clearance Certificate
An application for a Clearance Certificate can take up to 14 days to be processed
The Clearance Certificate is valid for 12 months from the date of issue
The Clearance Certificate must be provided to the Purchaser prior to settlement
If an Australian resident Vendor is disposing of multiple properties in one transaction, which combined sale value exceeds $750,000.00, a Clearance Certificate is not required to be obtained as the withholding is only calculated on the market value of a property being disposed of that meets or exceeds the threshold; not the combined amount.
If an Australian resident fails to provide a valid Clearance Certificate to the Buyer as required, 12.5% of the Purchase Price must be retained by the Buyer at settlement and paid to the Commissioner of Taxation on the day that the Buyer becomes the legal owner of the property. In these circumstances, the Australian resident Vendor may then claim a credit for the amount retained when lodging their following tax return.
How Do I Apply for a Clearance Certificate?
Only an Australian resident Vendor can obtain a Clearance Certificate. Solicitors, Tax Agents or other representatives are able to submit an application on the Vendor’s behalf.
Conveyancers and real estate agents are also able to apply online, however they should have the Vendor complete a paper form of the Application prior to lodging online./p>
What our clients Say About Us!
Just want you to know how much Marjorie and I appreciate your wonderful advice and service as we managed our way through the fairly complicated process of finalising our purchase and sale when there were 4 parties and I think 3 solicitors, involved in making it happen smoothly. Also your responsiveness to our changing needs, particularly with the last minute need to settle earlier. Should you wish to use me as a reference for the quality of your service please feel free to do so. Thanks again Rose and Max. Very best wishes
Jun and I would like to express our appreciation to your very professional services in assisting us to achieve a smooth settlement, we have started moving in and all services accounts have been set up. Thanks again for all your assistance.
We have used White Jordin Lawyers for our last 2 property purchases. We have found them to be very professional, thorough, and easy to communicate with. They handled a tricky situation with ease and we came out ahead. We wouldn't hesitate to recommend their services.