Foreign Acquirer Duty plus Foreign Resident Capital Gains Withholding Payments

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Foreign Acquirer Duty

In the 2016-2017 Budget the treasurer announced a new Foreign Acquirer Duty payable by foreign buyers of residential property in Queensland.

The tax will be assessed at 3% of the purchase price in addition to normal stamp duty rates.

For example, a home valued at $600,000 would cost approximately $19,070 for stamp duty at standard investment rates..  The New Foreign Acquirer Duty would add approximately an additional $19,000 in duty bringing the total to approximately $38,070 and this comes into force on the 1st of October 2016.

The Foreign Acquirer Duty will apply to the following:

Individuals who are not Australian citizens or permanent residents

Companies incorporated outside of Australia

Companies incorporated in Australia in which foreign persons have an interest of 50% or more

A trust where 50% of the "trust interests" are held be foreign persons (i.e. unit holders or beneficiaries)

Foreign resident capital gains withholding payments

From the 1st July 2016 the new Australian Taxation Office (ATO) Foreign resident capital gains withholding payments comes into effect for contracts entered into for properties with a purchase price of $2m or more.

Any sellers of properties priced at $2m or more who are Australian residents should make an application for their clearance certificate well before their property is sold.

Contact the ATO for further information https://www.ato.gov.au/general/capital-gains-tax/in-detail/calculating-a-capital-gain-or-loss/foreign-resident-capital-gains-withholding-payments---common-questions/