Can you explain the changes to Capital Gains Tax?
There have been some important changes to Capital Gains Tax or CGT Withholding for property transactions over $2 million dollars. The Federal Government introduced some new changes which commenced from 1st July 2016, which is the CGT Withholding Requirement on purchases. This means that vendors basically don’t get their 10% of the property sale/transaction funds until the obligation is completed.
Does this apply to all types of property?
Yes. This applies to all types of property. Commercial property, residential property, primary producing property. It also applies to consideration for when the market value is over $2 million dollars. It also applied to matrimonial transfers, deceased estates, gifts and any transactions on any property where the market value is over $2 million dollars. Whether it is a consideration or not.
Is it a big change?
It is an important change to the way property transactions and contracts are processed. It is important to make sure you get the right advice from the start, whether you are the purchaser or the vendor or the seller. It is important that you have the right advice and whatever Solicitor you are consulting is aware of the change to the legislation because everyone likes a smooth property transaction and everyone likes to be paid the correct amount. This legislation is important in the sense that it sets a requirement on both parties to withhold 10% of the sale price until the criteria are satisfied. The criteria being that you need to inform the Government of your residential status. Until you do that the Government holds 10% of the funds. Capital Gains Tax is an important requirement to comply with.
If you would like more information on Captial Gains Tax or CGT Withholding requirements, contact DBH Commerical Lawyers on 1800 324 324 or send us a message.