Australia: Capital Gains Withholding: Impacts on Australian and Foreign Residents

Asset types 

- Taxable Australian real property market value $750,000 or more 

• vacant land, buildings, residential, commercial property 

• mining, quarrying, prospecting rights in Australia 

• a lease over real property in Australia if lease premium paid 

• indirect Australian real property interests 

Australian entities (with membership interest 10% or more, where underlying value is principally in Australian real property) – includes shares in a company with a company title interest in real property 

• options or rights to acquire any of the above asset types 

Market value 

Purchase price negotiated between vendor and purchaser, acting arm’s length, ATO will accept the purchase price as proxy for market value. 

Where market value is different to stated purchase price, ATO will not accept purchase price as proxy for market value, purchaser will need to seek a separate expert evaluation. 

Note: Proxy for market value, is the purchase price before adjustment for any disbursements at settlement. 

Excluded assets 

• taxable Australian real property market value less than $750,000 

• an indirect Australian real property interest providing a company title interest with market value of less than $750,000 

• transactions on approved stock exchanges 

• transactions using broker-operated crossing system 

• transactions subject to another withholding obligation 

• securities lending arrangements, with no (CGT) liability and no payment obligation 

• transactions with vendor in external administration, bankrupt estate, scheme of arrangement, debt agreement, personal insolvency, agreement, or same circumstances under foreign law.

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