When there is change in government you hope they can dump all the stupid ideas of the previous government. But with the new government still needing to find savings stupid ideas seem not so stupid.
In the May 2013 Budget the Labor (one day they might learn how to spell their party’s name) stead they would introduce a withholding tax arrangement where non-residents sell certain properties and make a capital gain from 1 July 2016. So if you buy, yes buy, not sell, a commercial property or a residential premise valued at greater than $2.5 million, you need to establish if the seller is a non resident for tax. For if they are you only give them 90% of the price and send 10% to the Commissioner.
About once a month the AAT is called on to decide if a taxpayer is a resident or not. And now that job falls on property purchasers. Ridiculous.
Of course everyone says that you just put it in the contract. But this won’t work. The reason the law is being introduced is that these non residents take the money and run without paying tax. So now they just claim in the contract they are residents and tax the money and run.
And then the Commissioner come to the buyer and says where is the cash… This will only just penalise buyers…
Well done policy wonks… one day you might actually be involved in a real commercial transaction.
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