Issues to consider when buying and selling property
Nexia recently hosted an Australia-wide property roadshow where various tax developments that may affect taxpayers buying, selling or simply owning property were discussed.
Because property ownership is such an important issue, we want to remind our clients of some recent changes to:
- The tax treatment associated with residential investment properties (e.g. travel deduction and depreciation changes – please see our recent Tax Update for more information);
- Withholding obligations on purchasers of property
- 10% GST withholding on the sale of new residential premises (see recent top tax tips here); and
- 12.5% CGT withholding on the sale of any property for $750,000 or more unless the vendor has an ATO clearance certificate evidencing the vendor’s Australian tax residency;
- Superannuation measures impacting home ownership (e.g. superannuation saver scheme and superannuation downsize incentive); and
- Stamp duty and land tax issues (different in each State or Territory)
There is also a proposal to abolish the main residence exemption for taxpayers who are no longer Australian tax residents (please see our recent Tax Update for more information). Furthermore, foreign investors need permission from the Foreign Investment Review Board (FIRB) before purchasing residential properties (excluding some new dwellings) or agricultural land in Australia.
Because there are a myriad of complex tax issues and red tape affecting property transactions and ownership, we would recommend that you work closely with your Nexia representative to assist you in addressing the various issues (e.g. increased compliance obligations for purchasers of property under the GST and CGT withholding regimes) and risks involved in property transactions.
Trading names will soon be a thing of the past
Businesses are reminded that from November 2018, only registered business names (as distinct from trading names) will be listed in ABN lookup.
Therefore, businesses will only be able to keep on trading under their current trading name if they register that trading name with the Australian Securities and Investments Commission (ASIC) before November 2018.
Reminder: Pay your 2018 FBT liabilities by 28 May 2018
For the 2018 FBT year (from 1 April 2017 to 31 March 2018), employers must pay FBT at a rate of 47% on the grossed-up taxable value of fringe benefits. The 2018 FBT returns must be lodged by 21 May 2018 (if lodging by paper) or by 25 June 2018 (if lodging electronically through a tax agent e.g. Nexia) and payment is due by 28 May 2018.
Please see our recent Tax Update for more information on FBT.
