ATO Requirements


CLEARANCE CERTIFICATES

Australian Residents
 
If the property you are selling is over $750,000.00 you are required to apply to the Australian Tax Office (ATO) for a clearance certificate.  Clearance certificates will only be issued to Australian Residents and are usually issued within 24 to 48 hours from the time the application is made.  Application can be made from this link: https://www.ato.gov.au/FRWT_Certificate.aspx 
 
It is recommended you apply for the clearance certificate upon listing of the property.  The Certificate applies to you, not the property being sold, and is valid for 12 months so can be used for other sales during that 12 month period.  If you have not obtained a certificate we will remind you of this obligation upon receipt of your Contract.
 
This requirement applies to all property transfers including where a property is gifted or transferred or sold for less than market value.
 
Failure to obtain a clearance certificate will result in the buyer being required by law to withhold 12.5% of the purchase price which will be paid to the ATO.
 
Non Australian Residents
 
If you are not an Australian Resident the buyer of your property is required by law to withhold 12.5% of the purchase price and remit that sum to the ATO immediately following Settlement.  This amount is held by the ATO pending you lodging a Tax return and is to cover any possible Capital Gains Tax that may be payable by you as a result of the sale.
 
If you believe the Capital Gain is less than 12.5% or there is no capital gain you can apply to the ATO for a variation certificate which will vary the withholding rate from 12.5% to a lesser amount.  The variation certificate must be provided to the buyer prior to Settlement failing which the buyer must withhold 12.5% of the purchase price.
 
It is recommended that you apply for a variation certificate upon listing to ensure the certificate is received prior to any sale and/or settlement.
 

ATO PROPERTY REPORTING ONLINE

 
Since July 2017 new property reporting requirements commenced which means we will be asking you to provide a lot more information than usual to enable us to help you meet your obligations under these new laws.  The information you provide is submitted through Landgate who share the information with the ATO. The following are the new additional requirements which apply to both Sellers and Buyers:
 
Property related:
  • Contract date
  • Market value
  • Is there a new building on the land?
  • If the property is being bought or sold by a Trust – the name of the Trust
 
Individuals:
  • Dates of birth
  • Nationality
  • Contact telephone numbers
  • Email addresses
  • Country of residence and current residential address
  • Country code of Tax residence
 
Foreign Nationals i.e. not an Australian Citizen:
  • Dates of birth
  • Nationality
  • Contact telephone numbers
  • Email addresses
  • Country of residence and current residential address
  • Country code of Tax residence
  • Passport number
  • Visa number, subclass and expiry date 
  • FIRB Application number of foreign nationals i.e. not an Australian Citizen
 
Australian Companies:
  • Australian Business Number
  • Country of Incorporation
  • Contact names, telephone numbers and email addresses of Directors
 
Overseas companies:
  • Australian Business Number
  • Country of Incorporation
  • Contact names, telephone numbers and email addresses of Directors
  • FIRB Application number
  • Overseas entity registration number
  • Overseas entity identifier
  • Other entity identifier
 
But wait there’s more………… from the 1st July 2018 the ATO require us to get involved in withholding and remitting GST payable by developers and as more information comes to light we’ll share this on our Blog…………..  For now I’m considering changing our business name to Haskins Settlements, Conveyancing and Tax Collection Services.  All I need to do now is get the ATO to pay me for doing their job!!