When you’re looking at buying a property of your own, but you have an irregular income or manage your own business, you’ve probably looked at low doc home loans as a solution.
And we don’t blame you – it’s a great way to take control of your own finances and solidify a great financial future for you and your family. With that in mind, if you’re looking at buying a home valued at $2 million or more, the tax changes that area bout to come into effect are important to understand.
Are you looking at buying a home in this price bracket? To avoid having to pay money to the Australian Taxation Office as a withholding fee instead of to the seller,understanding the changes to the law will make the whole buying process much more streamlined.
Getting to grips with the ATO
Understanding the changes to the law will make the whole buying process much more streamlined.
For those who own a business, and as such don’t have the required documentation for a regular bank loan, the team at Redrock are your best bet for getting low doc home loan you need. They are experienced in dealing with unconventional cases,and can fund a home loan all the way up to $2.5 million.With that in mind,there’s a possibility that you’ll be buying a home valued at greater than the$2 million threshold.
“We encourage all Australian residents who are looking to sell property with a value of $2 million or more to apply for a clearance certificate as early as possible,” said Assistant Commissioner to the ATO Malcolm Allen.
“The clearance certificate will confirm that the 10 per cent withholding amount does not apply to the transaction. If a seller doesn’t provide a clearance certificate to the buyer by settlement, the buyer will be required to withhold10 per cent of the sales price and pay this to the ATO.”
Why is it important for the buyer to know?
It is the buyer’s responsibility to make sure they know exactly who is owed what.
As the buyer,you’ll be wanting to get into your new property with minimal stress. If the seller hasn’t obtained a clearance certificate by the settlement date, the buyer will have to withhold 10 per cent and pay that fee to the ATO – if this does not happen, the buyer will be fined.
While it is the seller’s responsibility to obtain the clearance documentation, it is the buyer’s to make sure they know exactly who is owed what. To avoid confusion,keeping in mind these tax changes could well make the property purchasing process significantly easier.
Get in touch with the Redrock team today to talk more about what these tax changes could mean for you.