19 June 2020
Sale of real property – Foreign resident capital gains withholding payment
We act for a vendor who has lived in the USA for a number of years but was born in Australia. They are one of three vendors who own one-third of the property each.
When does someone become a ‘foreign resident’?
Will this result affect having to apply for a clearance certificate?
Thank you for the question.
Residency status for taxation purposes is complicated and depends on the circumstances. See the ATO page Work out your tax residency for the tests that are used to determine residency status.
Note that if the market value of the property is $750,000 or above all three vendors, foreign or domestic, are required to apply for a Clearance Certificate.
See the Foreign resident capital gains withholding payment folder under A. Getting the matter underway in the By Lawyers Sale of Real Property guide for dedicated commentary and precedents. See also the ATO page Variations for further information.
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