Tucked away in the 23/24 budget was a surprise for all selling agents that, unless agents are prepared, may cause some issues for settlements in the new year, and it reads as below
The budget will be increasing the foreign resident capital gains withholding tax rate from 12.5 per cent to 15 per cent and reducing the withholding threshold from $750,000 to $0. The changes will apply to real property disposals with contracts entered into as of the 1st January 2025.
The Bill to enact the changes for the withholding rate and threshold reduction was introduced to Parliament last week and is expected to be pushed through soon.
Agents need to be aware of this important change and work closely with Settlement agents to ensure that certificates are obtained on time to avoid settlement delays.
Smart agencies are starting to put in place policies and procedures to ensure sellers obtain the certificates at time of listing and prior to marketing the property.
The certificates must be obtained by all parties on the title, they take days to be cleared and delivered and can last up to 12 months.
See the link below for more information on when and how to complete the application.