Foreign resident capital gains withholding payments change on 1st July 2017,

Capital Gains Withholding Provisions Have Changed!

The Government announced proposed changes to the foreign resident capital gains withholding (FRCGW) rate and threshold.

Capital Gains Withholding Provisions change on Saturday, 1st July 2017, in respect of both the sale price threshold and the withholding percentage.

For the sale of all properties where:

• The foreign sales contract is entered into on or after 1st July 2017; and

• The contract price is $750,000 or more (currently $2,000,000);

the Buyer must withhold 12.5% (currently 10%) of the purchase price and pay such monies to the Australian Taxation Office (ATO) on or before settlement, unless the Seller has obtained a Clearance Certificate from the ATO (Taxation Administration Act 1953 (CTH) - Subdivision 14-D).

However the existing threshold and rate will apply for any contracts that are entered into before 1st July 2017, even if they are not due to settle until after 1st July 2017.

For more information about the new provisions click here.