Vendors selling their multimillion-dollar homes this weekend could face a nasty shock at settlement time – the loss of hundreds of thousands of dollars because of poor legal advice.
This is because many may be unaware of new 10 per cent withholding tax rule, which came into force on July 1, and which applies to all property worth $2 million or more, including residential property.
To avoid being hit by the stiff penalty, all vendors selling at this price point must obtain a clearance certificate from the Australian Tax Office to prove they are Australian resident taxpayers.
But according to Sydney firm Aitken Lawyers, nine out of 10 real estate contracts they examined for homes likely to sell for $2 million or more make no mention of this new requirement.
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