We have many clients who reside overseas. Some of them have never been in Australia. However, they may have acquired residential properties in Australia previously as an investment or as a property that they want their children to live in during their studies in Australia.
With interest rate hikes, implementation of land tax or as their children finish their studies, the foreign home owner may wish to sell their property to transfer the property to someone else.
I am a foreign person and I have a property to sell. Who should I contact and what do I need to do?
Usually, you would need the following persons to help you to sell your property:
1. Lawyer or Conveyancer – They will help you to draft the contract so that your sales agent can put your property onto the market. Contract must contain all documents prescribed by the law. If you miss anything or if any documents are “out of date”, then it is possible that the buyer can get out of the contract even though they have signed it.
2. Sales Agent – Your sales agent’s job is to market the property for you, find you a suitable buyer and negotiate the price. They can also assist you in selling your property through an auction.
3. Once a buyer is found, your lawyer or conveyancer will help you to complete the remainder of the conveyancing process.
I am physically overseas. Do I need to fly to Australia to sell my property?
In Australia, most settlements take place electronically through platforms like PEXA.
Signing of documents can also be done online through electronic platforms like DocuSign.
Most things can be done online these days and is legal in many places throughout Australia. Hence, it is probably not necessary for you to physically come to Australia to sell your property.
Do I need to pay any taxes when I sell my property?
You may need to pay capital gains tax.
According to the law, if your contract price is $750,000 or more, then you need to apply for Capital Gains Withholding Clearance or Variation Certificate. Otherwise, the Australian Taxation Office can deduct 12.5% of your sale price at settlement from your sales proceeds. Many people do not need to pay that much tax, so it is usually a good idea to obtain either a Clearance Certificate or a Variation Certificate.
If you do not have any capital gains and you have obtained the relevant Certificate, then the ATO will not deduct anything from your sales proceeds on the day of settlement.
If you have some capital gains but below 12.5% of the sale price, then the amount ATO takes on settlement can be varied when you obtain the Variation Certificate. In this case, you can also offset the gains by taking into account any costs associated with your purchase and sale. For example, legal fees, agent’s commission, maintenance fees, stamp duty, mortgage repayment interest.
If you would like assistance in obtaining a Clearance or Variation Certificate, please feel free to contact us.
*Disclaimer: This is intended as general information only and not to be construed as legal advice. The above information is subject to changes over time. You should always seek professional advice before taking any course of action.*
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