If you're a visa holder looking to buy or sell property in Australia, staying informed about upcoming changes that could impact your financial obligations is crucial. From January 1, 2025, two significant updates will affect foreign property owners and buyers: Capital Gains Withholding and Surcharge Purchaser Duty.
These changes have been outlined by Jules Koralage at Prime Partners, a North Sydney-based accounting firm, ensuring accuracy and relevance to visa holders and foreign investors.
Capital Gains Withholding – What You Need to Know
If you sell property in Australia, 15% of the sale price will be withheld and remitted to the Australian Taxation Office (ATO) unless you obtain a clearance certificate.
- Australian residents can apply for a clearance certificate to avoid this withholding.
- Foreign residents and entities will automatically have 15% deducted at settlement, making it essential to plan and be aware of this financial implication.
Surcharge Purchaser Duty – Higher Costs for Some Visa Holders
Visa holders and non-residents purchasing property may be required to pay an additional Surcharge Purchaser Duty, which varies by state. In New South Wales, specific visa holders may be eligible for an exemption:
- Those on a Subclass 309 Partner Visa or Subclass 820 Partner visa who meet the 200-day residence requirement can be exempt from the surcharge.
- However, if your visa is pending or unapproved at the time of purchase, you will be required to pay a 9% surcharge at settlement.
Other Australian states have different surcharge rates and eligibility rules, so it's vital to check with local authorities to understand how these changes may affect you.
Key Takeaways for Visa Holders and Foreign Investors
- From January 1, 2025, foreign sellers will automatically have 15% of the sale price withheld, unless they obtain a clearance certificate.
- Visa holders in NSW on a Subclass 309 or Subclass 820 visa may be exempt from Surcharge Purchaser Duty if they meet the 200-day residence requirement.
- Buying property while your visa is still pending will trigger a 9% surcharge.
- Other states have different rules, so it’s essential to consult a legal or tax expert before making a purchase.
How to Prepare for These Changes
- If you are planning to sell property in Australia, apply for a clearance certificate early to avoid unexpected withholding.
- If you are a visa holder looking to buy, ensure you understand your eligibility for surcharge exemptions and consider the timing of your purchase.
- Consult a professional for tailored advice. Jules Koralage and the team at Prime Partners in North Sydney can provide expert guidance on these changes and how they impact you.
For more information and expert tax advice, reach out to Prime Partners to ensure you stay compliant and financially prepared.
About Rocket & Ash Immigration Law
At Rocket & Ash Immigration Law, we specialise in helping partners, graduates, and professionals navigate the complexities of Australian immigration law. Our expertise in visa applications ensures that you receive tailored advice and support throughout your immigration journey.
If you require assistance with your Subclass 482 Work Visa application or have any other immigration-related queries, our experienced team can help.
Please book a free 15-minute discussion with our team if you have further questions.
Written by Ines Jusufspahic, LPN: 5511366
This article does not constitute legal/financial advice or create an attorney-client relationship. For up-to-date information, please consult an immigration professional. Furthermore, please note that we do not receive any benefit or commission for the referral to Prime Partners.