From the 1st July 2016 all Purchasers of properties sold worth $2,000,000.00 or more, must withhold 10% of the purchase price unless they are given a Clearance Certificate by the Vendor.
Vendors of such properties, who are not foreign nationals, should apply for a Clearance Certificate as soon as their property has been sold.
If a Purchaser of a relevant property bought for $2,000,000.00 or more does not withhold the 10% CGT from the purchase price of the asset and admitted to the AGO, the Purchaser may be then liable to penalties and interest.
The Tax applies to Australian real estate, including land, buildings, both residential and commercial properties, leases over real property, mining, quarrying and prospective rights.
The market value of the property will be the purchase price negotiated between the Purchaser and Vendor acting at arms length as part of a competitive bargaining process.
If a Vendor suspects that the sale of his property may exceed $2,000,000.00, then he should apply as soon as possible for a Clearance Certificate in the Vendor’s name as set out in the Title is obtained and attached to the Contract of Sale.