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Topics on CGT and GST for property buyers (21)

Written by Ideas Group | Mar 19, 2021 4:40:52 AM

 

Understanding Buyer Obligations: CGT and GST Withholding

Buyers need to plan ahead to meet their Capital Gains Tax (CGT) and Goods and Services Tax (GST) withholding obligations when purchasing property.

It's crucial for property buyers to know about their obligations under the foreign resident CGT withholding rules and the GST withholding rules. Failure to comply with these rules can lead to penalties.

Tax Warning: A single transaction might be subject to both sets of withholding rules. For instance, if a buyer acquires new residential premises in Australia worth $750,000 or more from a foreign resident, they must fulfill obligations under both the foreign resident CGT withholding rules and the GST withholding rules.

Buyer's Obligations under the Foreign Resident CGT Withholding Rules:

  1. Determine if withholding applies to the acquisition.
  2. Calculate the amount to be withheld.
  3. Notify the ATO of the withholding obligation and pay the withholding amount.
  4. Withhold the determined amount at settlement.

For transactions related to Taxable Australian Real Property (TARP), specific steps must be followed.

Got questions? Reach out to Tax Ideas Accountants & Advisers at +61 2 83181545 or book an appointment on our live calendar.


 
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