Selling property? Do you have a Clearance Certificate?
We can help you avoid the new 12.5% tax.
From 1 July 2017, anyone selling property with a value of $750,000 or more has been required to provide a Clearance Certificate before settlement confirming that they are an Australian resident. If they can’t provide this certificate, then 12.5% of the sale amount must be withheld and paid to the ATO as tax.
These laws were implemented to ensure foreign residents paid tax on the sale of assets subject to Capital Gains Tax. Unfortunately, the way the law is written, everyone is assumed to be a foreign resident unless they provide a Clearance Certificate before settlement. As this is ultimately a tax issue, the Australian Taxation Office (ATO) is responsible for providing the Clearance Certificates. The application for a certificate is an ATO form, which includes a range of questions about the tax affairs of the vendor.
How EPOCH can help
EPOCH can assist you to comply with these new rules by:
- Preparing and lodging the application for the required Clearance Certificate
- Providing taxation advice where residency may be uncertain
- Providing taxation advice on whether any indirect real property interests may be subject to these rules.
We are committed to providing you with the peace of mind that the application was prepared by a leading tax advisory firm.
At EPOCH we understand that time is of the essence, particularly given that it may take the ATO up to 28 days to issue the Clearance Certificate. All applications will be lodged within 24 hours of receiving all information required, and will be lodged same day if all information is received before 1.00pm.
EPOCH’s fee for each application is $110 (including GST). Where a current property title search cannot be provided, an additional fee for a search will be charged. A fixed fee quote will be provided for any additional advice or services required.
A final tip
Clearance Certificates are typically valid for a 12 month period, so if you’re thinking of selling you should obtain the certificate straight away – don’t wait until the sale contract has been signed.
Contact us today