The Federal Government has reduced the threshold at which a vendor is required to provide a Foreign Resident Capital Gains Clearance Certificate (FRCGCC) to purchasers of real property. The new rules apply to all contracts for sale with a market value over $750,000 (previously $2,000,000) entered into from 1 July 2017.
If an Australian resident entity does not provide a FRCGCC (or a foreign resident entity does not provide an ATO-issued variation certificate) then the purchaser must withhold 12.5% (previously 10%) of the contract price at settlement.
