With the imposition of new laws there are new & additional new levels of work involved towards the completion of your property settlement.
The Australian Taxation Office and their Withholding tax implications for Foreign Resident and also the New GST on Residence, may expose both the buyer and seller to new compliance requirements and possible penalties, however if you believe these might apply to your settlement please inform your Conveyancer immediately to action and avoid penalties accruing on your side.
Most Conveyancers' like Lawyers would charge and hourly rate especially for dealing with 'out of scope' or extra work involved. You may have opted to undertake these actions yourself, however if you want your Conveyancer to handle all the required, be prepared to pay them for the extra work.
Here at A1 Conveyancing we have decided that the hourly rate is probably the fairest way of handling the unknown, however we have undertaken extra training at our cost to improve our knowledge in handling these matters for you. As such we are thinking of a capped surcharge on a user-pay model where a small surcharge is applied only as warranted, rather than impose an indefinite hourly charge. Giving our clients more certainty of their costs.
On 1 July 2017, the proposed changes to the Foreign Resident Capital Gains Withholding (FRCGW) rate and threshold will take effect.
These changes will apply to contracts entered into on, or after 1 July 2017 for real property disposals where the contract price is $750,000 and above. The FRCGW tax rate will also change from the existing rate of 10% to 12.5%.
The existing $2 million threshold and 10% rate will still apply for any contracts entered into before 1 July 2017 even if they are not due to settle until after 1 July 2017.
The change to the threshold from $2 million to $750,000 will result in many more properties requiring a clearance certificate for exemption of the withholding. The Australian Taxation Office (ATO) can only grant clearance certificates to a seller who is an Australian resident.
Budget 2017 Update
GST On New Residential Purchases
From 1 July 2018 the Federal Government will require all purchasers of new residential premises (new builds) to remit the GST component previously provided by developers/builders directly to the ATO as part of the property settlement process.
Little is known of the changes other than what has been recently posted on the ATO website HERE
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