If you are buying a property worth $750,000 or more, you may be required to pay 12.5% (or a lesser amount) of the purchase price to ATO unless the Seller complies with new laws. Failure to do so can have serious consequences.
The Australian Government introduced new laws targeted at preventing foreign residents from selling land in Australian and avoiding paying capital gains tax (CGT). The laws apply to contracts entered into on or after 1 July 2017 where the property sold has a market value of $750,000 or more. Click here for a brief summary of the laws and how they impact you.
Paying the 12.5% (or lesser amount), called the CGT Withholding Amount, is your responsibility. If you fail to pay the CGT Withholding Amount, you may incur penalties in addition to paying the CGT Withholding Amount. Here are some tips to avoid the pitfalls of these new laws: