Makes me laugh that "the Federal Government will strengthen compliance" BY MAKING OTHER PEOPLE DO THEIR JOB!!!! Yet another coming tax trap for buyers of new properties. GST Withholding.
From 1 July 2018, the Federal Government will strengthen compliance with the Goods & Service Tax (GST) law by requiring purchasers of newly constructed residential properties or new subdivisions to remit the GST directly to the Australian Taxation Office (ATO) as part of settlement. Under the current law (where the GST is included in the purchase price and the developer remits the GST to the ATO), some developers are failing to remit the GST to the ATO despite having claimed GST credits on their construction costs.
The measure will require the purchaser of newly constructed residential properties of new subdivisions to remit the GST on the purchase price directly to the ATO as part of Settlement for contracts on or after July 1, 2018.
Changing the business mindset from Boomer property consumer to Millennial property consumer, is here, Don't lose sleep, this article might be of assistance.
Conveyancers - are you meeting the needs of your Millennial clients? By Bek Hayes, CEO AICSA
One of the largest generations in history is about to move into its prime spending years. Millennials are poised to reshape the economy; their unique experiences will change the way we buy and sell, forcing companies to examine how they do business for decades to come.
What keeps you up at night? For me, one of my biggest concerns is the impact of the Millennial generation on the Baby Boomer formed Association. Running an Association, meeting Member expectations, keeping it relevant, alive, innovative is no easy task – although I love a good challenge and I definitely have one!
The ‘modern’ Association was set up by Boomers for Boomers – and they are a world away from the digital native Millennials. Taking the Association into the future means significant change and change away from the post-WW2 model we are so familiar and comfortable with. Technology has driven change; the millennial generation is the first to have grown up in an always on fully digital world. Their passion for technology shapes the way they live and shop. They live and work by their smart device – the world has shrunk as social media platforms have expanded.
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.
New Charge for Foreign Owners for Empty Properties
Foreign persons who apply for approval to purchase residential property after 9 May 2017 will face a new annual vacancy charge to be imposed if the property is not occupied for at least six months per year.
The charge will be levied annually and will be equivalent to the purchase application fee imposed at the time the property was acquired by the foreign investor.
Details of the new charge can be viewed HERE
FIRB approval for sale of new apartments limited to 50%
Developers selling under a New Dwelling Exemption Certificate issued by FIRB will now
Developers take heed. Update to changes to the Sale of Land Act- means some extra protection for buyers, where property is not yet owned by the developer.
Update to e-Bulletin Issue #66
On 3 April 2017, the Sale of Land Amendment Act 2016 (the Act) came into effect in Western Australia. The legislation introduces greater protections for consumers when signing sales contracts for land that is not yet owned by the developer.
From July 1 2017, new Commonwealth Government reporting requirements will be introduced that will affect all real estate property transfers in Western Australia.
The reporting requirements are being introduced following agreement by Commonwealth, State and Territory Treasurers to establish a National Register of Foreign Ownership of Land Titles. This Register will be administered nationally by the ATO. In WA, Landgate will collect and report the required information to the ATO.
For each transaction of freehold (and some leasehold interests)
AICWA recently advised members of the decision by The Registrar of Titles Ms Jean Villani to introduce a change of lodgement processes by August 1st 2017.
On August 1st this year, Landgate introduced changes to lodgement process affecting mortgagees, specifically, for the electronic lodgement of mortgages and discharges of mortgages (via PEXA).
It is now envisaged that the next step towards paperless conveyancing is for the scope of eligible document types to be broadened so as to include:
Landgate is seeking comments and feedback from the AICWA on the proposed change. While the finer details of the process have yet to be determined Landgate have indicated that they wish to understand what potential issues or considerations exist in implementing this “next step”. An investigation followed by a lengthy consultation period will hopeful ensure the creation of processes that are accepted by the majority of AICWA members. It is important to note that there are many external impacts that will result from this change that impact conveyancers. Landgate are keen to understand these impacts and where possible work with AICWA to achieve or facilitate positive outcomes.
Listed, Sold or buying a property market value of $2 mil. or over?-ATO clearance certificate is required!
Contracts dated 1 July 16 on wards, will have the new requirements on ALL transactions with market value of $2 million or over.
Unless the Seller provides an Australian Taxation Office (ATO) 'clearance certificate' for each registered proprietors name (matched to the title) to the buyer 2 business days prior to settlement (-timing subject to REIWA special condition).
Then the Buyer must withhold 10% of the Purchase price (more specifically the 'First element of the cost base'-Capital Gains Tax defined term) from the Seller and apply for an ATO Payment Reference Number (PRN) then remit that payment to the ATO once settled, and before Title registration.
Even if Selling or Buying a percentage, where a total property value (aggregated/extrapolated) $2 million or more would likely impact that transaction.
Designed to catch Tax evaders, the new law places liability on the Buyers to withhold payment from the Seller unless they are given a clearance certificate, or exempted by approved variation.
Keep me updated, join us here...