loader image

Home > Blog > New withholding obligations for Australian real estate

New withholding obligations for Australian real estate

Date: 30 September 2016

The new Foreign Resident Capital Gains Withholding (FRCGW) regime commenced on 1 July 2016 and imposes withholding obligations on purchasers of certain assets which are classified as Taxable Australian Property (TAP). TAP includes direct interests in land, leases and mining rights and indirect interests in Australian real property such as shares in certain companies that own TAP. The FRCGW regime is aimed at improving the collection of tax liabilities from foreign residents when they have disposed of Australian assets. It is important to note that these rules place the responsibility of withholding and payment of the tax on the purchaser.

In relation to real property transfers for more than $2 million, a purchaser is required to remit 10% of the purchase price to the ATO. Importantly, the rules assume that all vendors are foreign residents unless a clearance certificate or vendor declaration has been provided to the purchaser.

If you are involved in a real estate transaction in excess of the $2 million threshold, Roberts & Morrow can assist in advising on your withholding obligations (for purchasers) or obtaining the necessary clearance certificate or declaration (for vendors).

UPDATE: From 1 July 2017 the FRCGW regime was changed in two ways. Firstly the property threshold was reduced from $2 million to $750,000. Secondly the withholding tax rate increased from 10% to 12.5%.

Know More

Property Subdivision Projects: The Tax Implications

Property Subdivision Projects: The Tax Implications

As the urban sprawl continues in most major Australian cities, we are often asked to advise on the tax treatment of subdivision projects. Before jumping in and committing to anything, it is important to understand the tax liabilities that might arise from these...

read more
Business Deductions

Business Deductions

Understand which business expenses can be claimed as tax deductions. What you can claim You can claim a tax deduction for most expenses you incur in carrying on your business if they are directly related to earning your assessable income. Types of business expenses...

read more
Year-End Tax Planning & What’s New from 1 July 2025

Year-End Tax Planning & What’s New from 1 July 2025

As we approach the end of the 2024–25 financial year, now is the final time to review your tax position and take advantage of strategies to legally minimise your tax liability. Below are key areas to consider before 30 June 2025, along with important changes taking...

read more