From 1 July, all home owners selling a property worth more than $2 million will have to obtain certification from the ATO proving their residency, or face a 10% withholding tax.
In the latest of a raft of measures aimed at cracking down on foreign property investors, the ATO will now require all owners selling a property worth more than $2 million to obtain certification of their residency.
Failure to obtain the necessary documents will result in the owner paying a 10% withholding tax when they sell their property.
The measure is designed to clamp down on foreign property owners who avoid paying capital gains tax when they sell Australian properties.
The move comes amid a slew of measures aimed at curbing foreign property investors.
All four of the major banks have curbed lending to foreigners, and Citigroup's local arm will no longer approve mortgage applications that rely on income in five Asian currencies.
The Foreign Investment Review Board has also cracked down on unlawful purchases, forcing foreigners to sell 27 properties worth more than $76 million.
Monika Tu, a Sydney agent who specialises in luxury Sydney property to Chinese investors, told The Australian, “It’s a nightmare for some buyers at the moment, there’s just so much waiting and uncertainty.”
“The market is perfect in the sense that there are lots of buyers and people who want to sell, but the point is that it’s made very difficult by some of these rules,” she said.
The impact will be felt most strongly in Sydney and Melbourne. Almost 4.5% of homes on the market in NSW are worth more than $2m, and almost 2.5% in Victoria.
See also:
Foreign buyer policies taking a toll, but not in Brisbane.
Property council urges NSW not to increase stamp duty, land tax for foreigners.