NewsVendors who sell a property for $750,000 or more now need to obtain a clearance certificate from the ATO establishing they are not subject to the Foreign Capital Gains Withholding Tax. Without it, the purchaser is obliged to withhold 12.5% of the sale price and remit it to the ATO.
Vendors can still apply for a clearance certificate after the event but would have to wait until the end of the financial year to reclaim the amount, so the message is do it sooner rather than later, ideally as soon as the property is listed.
All Vendors need to apply for a certificate. If there is more than one vendor and any of them is deemed by the ATO to be liable, the full 12.5% will be withheld regardless of whether the other vendor(s) are liable or not.
The certificate is valid for two years and covers any property sold in that time – it’s about the vendor, not a particular property. Applications should be made online via the ATO website, where more information is also available: www.ato.gov.au.