By thoroughly understanding your GST and CGT obligations, you can ensure compliance with tax laws and avoid potential financial penalties. If you have any questions or need clarification on these points, consult with a tax advisor or finance professional.
If the Seller has given notice that the Buyer is required to withhold a part of the purchase price, under section 14-250 of Schedule 1 to the Taxation Administration Act 1953 (Cth) you will need to pay that amount to the ATO. Understanding whether you need to withhold GST is important as it affects the net amount payable to the Seller and your obligations to the ATO.
You will be required to withhold and pay 12.5% of the purchase price to the Australian Taxation Office (‘ATO’) unless each Seller produces a valid ATO clearance certificate or a variation notice reducing the Capital Gains Tax (‘CGT’) withholding amount prior to settlement. This requirement is designed to ensure that non-resident Sellers pay the correct amount of CGT. As a Buyer, it is important to verify the Seller's compliance with this requirement to avoid penalties.
Disclaimer: Every property transaction is different, and the information provided may not be relevant to your circumstances. By using this site you agree that the information provided is for general purposes only and does not constitute legal, financial, or professional advice.
