According to a new property tax regulation being drafted by the Australian Ministry of Finance: After a non-Australian tax resident sells an Australian property worth $2.5 million, the buyer will have the right and responsibility to withhold 10% of the payment to the tax bureau when paying for the house.
The Treasury Department stated that Australians have the right and obligation to withhold 10% of the purchase price of Australian real estate sold by overseas persons for tax payment to the Australian Taxation Office. This will become an effective means for the Australian tax system to collect value-added tax on overseas properties.
The new regulations will be implemented on July 2016, 7:
Although the new regulations are still under consideration, their implementation has become inevitable.
The new regulations will require buyers of real estate worth $2.5 million to immediately withhold 10% of the house price when confirming that the seller is an overseas resident, and directly submit it to the tax bureau as a value-added tax withholding.
The heavy responsibility falls on the buyer:
Although the overseas sellers face the fate of being immediately deducted 10% of the house price, the real heavy responsibility falls on the Australian buyers.
According to the envisaged regulations, the buyer must do his homework to determine whether the seller is an overseas tax resident, and determine whether to withhold 10% of the tax and submit it to the tax bureau based on the judgment. If the buyer fails to withhold the deductible amount, he may have suffered it on his behalf and face punishment from the tax bureau.
Regardless of whether you are a seller or a buyer, as long as you are a rich man with a $2.5 million real estate transaction, there are more procedures to go through.
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