As from 1 July 2017, if a foreign resident disposes of Australian real property with a market value of $750,000 or more, the purchaser will be required to withhold 12.5% of the purchase price and pay it to the ATO unless the seller provides a variation; this is referred to as a “foreign resident capital gains withholding.”

Also, Australian residents who dispose of Australian real property with a market value of $750K or more will need to apply for a “clearance certificate” from the ATO to ensure that amounts are not withheld from their sale proceeds.

Therefore all these transactions will require both the vendor and the buyer to consider if a clearance certificate is required.

The existing threshold and rate will apply for any contracts that were entered into from 1 July 2016 and before 1 July 2017, even if they are due to settle after 1 July 2017.