The Australian government recently announced changes to the law as part of a crackdown on foreign persons buying property in Australia.
Unfortunately the way this has been done by the government means that any sale of property for $750,000.00 or more is potentially caught so that the purchaser must withhold 12.5% of the sale price from the vendor and send that money directly to the ATO unless the vendor can provide a 'clearance certificate' from the ATO before settlement.
It does not matter wither the vendor is an Australian citizen, or not and it does not matter whether the vendor pays tax at all.
The changes are said to impact over 60 per cent of all property buyers and sellers in Australia.
The further red tape means that more time will be spent on settlements and may result in increased costs for buyers and sellers.
Buyers could face a penalty if they do not withhold the amount that they should.