The Australian Taxation Office (ATO) has introduced legislation, valid from the 1st July 2016, which affects investors who plan to buy or sell properties with a value of $2 million or more.
Australian residents who are selling a property with a market value of $2 million or more are now required to complete an ATO Clearance Certificate, which confirms a 10% withholding amount of the sale price does NOT need to be withheld.
If the seller fails to provide the clearance certificate, the purchaser is required to withhold 10% of the sale price and pay this to the ATO.
Certificates are valid for 12 months from date of issue and can be downloaded from the ATO web site.
Severe penalties apply to both sellers and purchasers for non-compliance.