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Star & Associates
Level 7, 16 O'Connell Street
Sydney NSW 2000

New foreign resident CGT withholding regime

The ATO has released the details of how it will administer the new foreign resident CGT withholding payment regime.

The new withholding regime introduces a 10 per cent non-final withholding on payments made to foreign residents under contracts entered into on or after Friday 1 July 2016 to dispose of certain taxable Australian property consisting of:

  • real property in Australia – land, buildings, residential and commercial property
  • lease premiums paid for the grant of a lease over real property in Australia
  • mining, quarrying or prospecting rights
  • interests in Australian entities whose majority assets consist of the above such property or interests
  • options or rights to acquire the above property or interest

An exclusion applies where the market value of the CGT asset is below $2 million.