Recent changes to the tax legislation has meant that the ATO now classes all property sales over $2million as a foreign investment transaction, which means if you do not obtain a clearance certificate from the ATO, you will have to withhold GST from the sale proceeds and could end up paying the ATO 10% of the purchase price.
To avoid this, the seller will need to submit a clearance certificate application, which provides the details of the sale so that the ATO can establish your tax residency status. We recommend to complete and lodge this as early as possible to ensure no withholding occurs. The application must be submitted on or before the day of settlement of the property.