Foreign resident capital gains withholding tax (source: The Treasury)

On 6 November 2013, the Government announced that it would proceed with a 10 per cent non-final withholding tax on the disposal, by foreign residents, of certain taxable Australian property. The purpose of the regime is to assist in the collection of foreign residents’ capital gains tax liabilities.

Where the seller of certain Australian assets is a foreign resident, the buyer will be required to pay 10 per cent of the price to the Australian Taxation Office as withholding tax. This withholding obligation will not apply to residential property valued under $2.5 million.

In October 2014, the Government released a discussion paper consulting on the design of the measure.

The Government is now releasing draft legislation for public comment.

Closing date for submissions: 7 August 2015

If you would like more information on how this could affect you please contact morrows@morrows.com.au