June 23, 2017

Capital gains withholding: Impacts on foreign and Australian residents

New rules apply to vendors disposing of certain taxable Australian property under contracts entered into from 1 July 2016. A 10% non-final withholding will be applied to these transactions at settlement.

Proposed change
On 9 May 2017 the government announced proposed changes to the foreign resident capital gains withholding (FRCGW) threshold and withholding rate. The changes will apply to contracts entered into on or after 1 July 2017:
for real property disposals where the contract price is $750,000 and above (currently $2 million)the FRCGW withholding tax rate will be 12.5% (currently 10%).The existing threshold and rate will apply for any contracts that are entered into before 1 July 2017, even if they are not due to settle until after 1 July 2017.

Please consider these proposed changes when referring to information on this webpage.

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