As your trusted tax advisors, we’re here to guide you through the latest tax updates from the 2023-24 Mid-Year Economic and Fiscal Outlook (MYEFO). Here’s what you need to know about the ATO clearance certificate and other critical tax changes.
Changes to ATO Interest Charges
The ATO currently applies General Interest Charges (GIC) and Shortfall Interest Charges (SIC) on overdue tax debts. While these charges are currently tax-deductible, this will change from 1 July 2025, when GIC and SIC will no longer be deductible.
This means higher costs for:
- Late tax payments
- Correcting tax liabilities
To avoid these additional expenses, it’s crucial to:
- Accurately self-assess tax liabilities.
- Pay tax obligations on time.
Mandatory ATO Clearance Certificates for Property Transactions
If you’re selling real property, here’s a crucial update:
Starting 1 January 2025, all Australian resident vendors must obtain an ATO clearance certificate before settlement. This applies regardless of the sale price, replacing the previous rule where only properties sold above $750,000 by foreign residents were subject to withholding tax.
Key Points:
- Without a clearance certificate, 15% of the sale price may be withheld during settlement.
- The certificate is valid for 12 months from the date issued.
- You must apply for the certificate to avoid settlement delays.
How to Obtain an ATO Clearance Certificate
- Online Submission: For faster processing, apply online via the Australian Taxation Office (ATO) website.
- Paper Form Option: Complete and submit a PDF version of the application if necessary.
- Key Information Required: Ensure your application includes up-to-date details such as your residency status and the corporate trustee details for the property.
What You Need to Know About Resident Capital Gains Withholding
With these changes, understanding resident capital gains withholding is critical for property sellers. Foreign residents selling properties must still adhere to foreign resident capital gains withholding requirements.
Whether you’re managing multiple properties or a single property, our team can assist you in navigating the:
- Residency status determination.
- Requirement to obtain a clearance certificate.
- Property transaction process.
Why Choose Endurego Tax?
At Endurego Tax, we’re dedicated to making tax compliance simple for residents of Inner West Sydney. From helping you obtain a gains withholding clearance certificate to ensuring your property transactions are hassle-free, we’re here to support you every step of the way.
For assistance or inquiries, contact us at 1800 841 312 for fast solutions or reach out directly to our office.
Stay informed, stay prepared, and let Endurego Tax guide you through these important tax adjustments.
Endurego Tax – Your Partner in Tax Solutions for Inner West Sydney.
