If you purchase a property worth $2m or more on or after July 1 2016, you will be required to withhold 10 per cent of the purchase price and remit it to the ATO UNLESS the vendor is able to provide a special purpose tax resident’s “clearance certificate” from the ATO. It does not matter if the vendors were born in Australia and have lived all their lives in Australia — unless they have that clearance certificate, they are classed as a foreigner and the buyer must send 10 per cent of the purchase price to the tax office.
…To be fair, in the vast majority of cases local resident vendors will have no problem obtaining a “clearance certificate”.
…Chinese and other Asian investors face a Hobson’s choice. They will not enjoy getting a tax clearance but nor will they appreciate the buyer of their property taking 10 per cent off the purchase price.
…Chinese investment in property has saved us from the worst effects of the big fall in the mining investment boom. But look at what is now happening:
- Money is now harder to bring into Australia from China
- Australian banks are imposing a credit squeeze on Chinese buyers (Banks risk blowback on Chinese burns, May 16).
- On July 1 the Victorian state government is set to raise the levy on foreign purchases of apartments from 3 per cent to 7 per cent.
Bob, if you base your economy on a lie, eventually you will be found out.
Time to face the music.
