New foreign resident withholding tax on real estate transactions have come into force and purchasers may be required to withhold 10 percent tax on the sale of certain Australian real property interests under contracts entered into on or after 1 July 2016.
The withholding tax will be payable by purchasers, be they resident or non-resident, acquiring relevant Australian assets from a non-resident vendor unless an exemption applies.
The relevant assets are:
The amount of the withholding tax is 10 percent of the purchase price for the asset and is payable on or before the day the purchaser becomes the owner of the property, i.e. generally on or before settlement rather than contract date.
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