The Tax and Superannuation Laws Amendment (2015 Measures No 6) Act 2016 introduces a new regime imposing withholding obligations on payments made to foreign residents that dispose of certain taxable Australian property. The purpose of the regime is to assist in the collection of the CGT liabilities of foreign residents.
Broadly, where a foreign resident disposes of certain taxable Australian property, the purchaser will be required to withhold and pay to the ATO 10 per cent of the proceeds from the sale. This amount will be 10 per cent of the first element of the cost base of the asset (usually, the total purchase price). The new regime will apply to contracts entered into on or after Friday 1 July 2016.