New GST Laws for Vendors

Are you selling a property?

Is your property selling for 750K or more?

You could lose 12.5% of the price to the ATO at settlement if you don't have the new Certificate. 

As from 1 July 2017, there are changes to the GST laws for Sellers of property in Australia.  Homeowners selling after July 1, selling a property in Australia for more than $750,000 will have to provide a clearance certificate to the buyer to prove they are Australian.

If that certificate is not provided, the buyer is forced by the Australian Taxation Office to withhold 12.5 per cent of the purchase price and pay it the ATO – which on a $750,000 sale would equate to $93,750.

Previously, the threshold was $2,000,000 and the amount withheld at this price was only 10%.

The aim of the certificate is to capture foreign owned property transactions and ensure that an appropriate amount of tax is paid within Australia.

It would be prudent as a real estate agent to recommend to all Sellers at the time of listing that they are required to obtain this clearance certificate before settlement. This will prevent delays in settlement in the event that there is a delay in obtaining the certificate.
 
The certificates can be ordered online for free and last for up to twelve months.

For more information or to obtain your certificate, visit the ATO website here.