Capital Gains Withholding Provisions change

There will be a Capital Gains Withholding Provisions change on Saturday, 1st July 2017, in respect of both the sale price threshold and the withholding percentage.
For the sale of all properties where:
  • The sales contract is entered into on or after 1st July 2017; and
  • The contract price is $750,000 or more (currently $2,000,000);
the Buyer must withhold 12.5% (currently 10%) of the purchase price and pay such monies to the Australian Taxation Office (ATO) on or before settlement, unless the Seller has obtained a Clearance Certificate from the ATO (Taxation Administration Act 1953 (CTH) – Subdivision 14-D).
The existing threshold and rate will apply for any contracts that are entered into before 1st July 2017, even if they are not due to settle until after 1st July 2017.