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Budget 2017

Budget 2017 Update

GST On New Residential Purchases

From 1 July 2018 the Federal Government will require all purchasers of new residential premises (new builds) to remit the GST component previously provided by developers/builders directly to the ATO as part of the property settlement process.

Little is known of the changes other than what has been recently posted on the ATO website HERE

The AICWA is deeply concerned that Settlement Agents in Western Australian are not recognised to assist or facilitate the collection and remittance of GST to the ATO.

Foreign Resident Capital Gains Tax

Members will recall ATO Legislation that took effect as of July 1st 2016 requiring that all sales over $2m be assessed to determine what (if any) Capital Gains Tax (CGT) liability exists for foreign investors depose of real property. In the recent 2017 Budget two significant changes have occurred.

  1. The withholding rate on capital gains tax that foreigners must pay will increase from 10% to 12.5%from July 1st 2017
  2. Withholding requirements will now apply to the sale of properties of $750,000.

Details of the change can be viewed HERE

New Charge for Foreign Owners for Empty Properties

Foreign persons who apply for approval to purchase residential property after 9 May 2017 will face a new annual vacancy charge to be imposed if the property is not occupied for at least six months per year.

The charge will be levied annually and will be equivalent to the purchase application fee imposed at the time the property was acquired by the foreign investor.

Details of the new charge can be viewed HERE

FIRB approval for sale of new apartments limited to 50%

Developers selling under a New Dwelling Exemption Certificate issued by FIRB will now only be able to obtain exemption to sell up to 50% of a new development to foreign purchasers. The cap will be imposed on all New Dwelling Exemption Certificates which are applied for on and from 9 May 2017.

Details of the change can be viewed HERE



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