When an Australian resident for tax purposes, sells property valued at $750,000 or more, they must have a FRCGW certificate to present to the purchaser at or before settlement.
If an FRCGW is not provided 12.5% of the property purchase price must be withheld and paid to the ATO. To claim back the credit that was withheld you must lodge a tax return (even if your income was below the threshold to lodge) or if capital gains tax (CGT) is applicable, a reduced amount.
You will need to provide a copy of the payment confirmation from the purchaser to your tax agent when completing your tax return. You agent will declare your Australian assessable income, including any capital gain or loss from the disposal of the asset & claim a ‘Credit for any withholding amount’ taken from the sale proceeds.
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