Buying property? Selling property? The process just got more
There have been a number of changes to the laws surrounding
buying and selling real estate, and the processes involved in the
past couple of months, mainly focusing on cracking down on foreign
investors and attempting to reduce the rising threat of identity
The key changes are:
From 21 June 2016, the 2016 NSW Budget introduced a 4
per cent surcharge purchaser duty on the purchase of
residential real estate by foreign persons. The surcharge is in
addition to the duty which would normally be payable on the
purchase of residential property.
Foreign purchasers will no longer be entitled to defer their
payment of stamp duty on off the plan purchases of residential
property . Previously, stamp duty on any off the plan purchase
could be deferred by 12 months.
From July 1 2016, purchasers of property where the purchase
price is $2 million or more will be required to pay an additional
withholding tax of 10% of the sale price to the ATO. This
requirement can only be avoided if a clearance certificate
confirming that the vendor IS NOT a foreign resident is provided to
the purchaser before settlement. Payment is due upon
Australian residents selling property for $2m or
more from 1 July 2016 must obtain a clearance certificate
to provide to the purchaser, otherwise the withholding tax will be
Verification of identity
On 1st May 2016, the Land and Property
the implementation of the Verification of Identity
(VOI) Standard. Anyone who is required to sign a
to document which deals with land (for example a transfer of land,
a commercial or retail lease, a mortgage) must have their identity
verified. This involves a face-to-face interview, sighting eligible
original ID documents and retaining evidence for 7 years.
Compliance with this standard becomes mandatory for all land
dealings (paper and electronic) on 1st August
From 18 July 2016, a Purchaser
Declaration Form from the Office of State Revenue must be
completed by any person entering into a transaction that results in
the acquisition of an interest in land in NSW, on or after 21 June
2016. This declaration must be completed by all purchasers, and
signed by a qualified witness declaring the supporting
documentation (which includes a certified copy of birth certificate
or passport if the party is an individual).
What does this mean for you?
If you are buying or selling property, or entering into some
other type of transaction to do with land, such as a subdivision or
lease, you will find that there are a few more steps to the
process. Your conveyancer or lawyer will be asking you for more
documentation and identification, so that they can fulfil their
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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ATO has released 2 draft fact sheets relating to the 2010 amendments to corporate law and tax in relation to dividends.
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