05 December 2024
From 1 January 2025, important changes to the Foreign Resident Capital Gains Tax (CGT) Withholding rules will come into effect, impacting both buyers and sellers of property.
The changes, introduced under the Treasury Laws Amendment (2024 Tax and Other Measures No. 1) Bill 2024, passed both houses of Parliament on 28 November which currently awaits royal assent.
Under the changes, the withholding rate will be increased from 12.5% to 15% and the threshold before which withholding applies will be removed.
Buyers will have an increased responsibility to ensure compliance when purchasing property. If the seller does not provide a valid Clearance Certificate from the ATO confirming their residency status, buyers must withhold 15% of the purchase price and remit it directly to the ATO at settlement.
These changes significantly broaden the scope of foreign resident CGT withholding, creating new compliance requirements for property transactions from 1 January 2025.
Buyers and sellers must act proactively to meet these obligations, as non-compliance could result in significant unintended outcomes.
If you are looking at buying or selling a property in the new calendar year and need to know more, please get in touch.
Sky Accountants Ballarat
Phone: 03 5332 8855
Office Address: 902 Howitt Street, Wendouree, Victoria 3355, Australia
Postal Address: PO Box 2234, Bakery Hill, Victoria 3354
Sky Accountants Gisborne & Macedon Ranges
Phone: 03 5428 1400
Office Address: 45 Hamilton Street, Gisborne, Victoria 3437, Australia
Postal Address: PO Box 270 Gisborne Victoria 3437
Sky Accountants Kilmore
Phone: 03 5782 2299
Office Address: 74B Sydney Street, Kilmore, Victoria 3764, Australia
Postal Address: PO Box 190 Kilmore Victoria 3764