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BAFC Settlements awarded the Betty Quelch Award

The Australian Institute of Conveyancers have voted for 2018 and BAFC Settlements have been awarded the Betty Quelch Award for “EXCELLENCE IN SERVICE”. Amanda Pietrangeli and Carly Brouwer accepted the award on behalf of the BAFC team. Congratulations to Amanda Goadby, Kiara Marsh, Mandy Oehm, Amanda Pietrangeli, and Carly Brouwer for their tireless efforts ensuring that every customer receives the BAFC treatment.

The values of BAFC Settlements are simple.
To have the client’s interest at heart, and to deliver service excellence to every person we come in contact with throughout the property transaction.
Human connection is still at the heart of every property transaction.

If you’d like to experience it for yourself, call us on 9335 9133. ALL HOURS. Our team will make sure that you are treated with 10 star service, as are ALL our clients!

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New Verification of Identity Policy

In order to reduce the risk of title fraud, each state authority introduced reforms for a new Verification of Identity Policy (VOI)

As part of the Western Australia’s commitment to the implementation of electronic conveyancing, business practices, and policy changes are required. The introduction of VOI is the first step in policy changes required to provide a consistent approach for real property transactions in both the current paper lodgement system and electronic conveyancing when it is implemented.

Purpose of the Policy
The policy reduces the risk of land title fraud and other improper land title dealings in South Australia, thereby strengthening the security, certainty and integrity of Western Australias Torrens land title system.

How does it affect you?
Your conveyancer will explain what the requirements are and assist you through the process. They may carry out the identification themselves or may use an agent to do so.

A variety of documents may be used to verify identity including passports, Australian driver’s licence, Medicare care card and more. Your conveyancer will assist you to understand what documents may be used to meet the minimum requirements.

See more information here from LANDGATE

 

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Foreign resident capital gains withholding payments – impacts on foreign and Australian residents

On 9 May 2017, the Government announced changes to the foreign resident capital gains withholding (FRCGW) rate and threshold. The changes will apply to contracts entered into on or after 1 July 2017:

* For real property disposals where the contract price is $750,000 and above (currently $2 million)
* The FRCGW withholding tax rate will be 12.5% (currently 10%).

The existing threshold and rate will apply for any contracts that are entered into before 1 July 2017, even if they are not due to settle until after 1 July 2017.

Background
Broadly, where a foreign resident disposes of certain taxable Australian property, the purchaser is required to withhold an amount from the purchase price (see note below) and pay that amount to the Australian Taxation Office (ATO).

Note: the legislation specifies that the withholding is actually on the “first element of the cost base”. However, as purchase price is understood by vendors and purchasers, and in many instances will equate with the “first element of the cost base”, we have used the term purchase price for simplicity.

Legislation and supporting material
The Treasury Laws Amendment (Foreign Resident Capital Gains Withholding Payments) Act 2017External Link received Royal Assent on 22 June 2017. For transactions entered into from 1 July 2017 the threshold and rate as stated in this Act will apply.

For transactions prior to 1 July 2017 the threshold and rate as stated in Tax and Superannuation Laws Amendment (2015 Measures No. 6) Act 2016External Link will apply.

Information on the application of the FRCGW is available on the ATO website and via the following links:
Capital gains withholding: Impacts on foreign and Australian residents
More information

The following is Information supplied by the Foreign Investment Real Estate Initiative, Public Groups and International – Australian Taxation Office.

New withholding rules on sales of property by foreign residents have been introduced at a time when foreign investment in Australia, including in residential real estate, is increasing. The rules will apply where real property contracts are entered into on or after 1 July 2016, but only apply to sales of residential property where that property has a market value of $2 million or more. Withholding does not apply to sales by Australian resident sellers, but these sellers will need to obtain a clearance certificate that they can provide to the purchaser.

The changes were announced in 2013 and became law earlier this year. The ATO has talked to real estate agents, conveyancers and legal practitioners to ensure the industry is prepared to help their clients meet their withholding obligations.

Withholding arrangements to make sure foreign residents pay capital gains tax on the sale of residential property exist in many countries, including in Canada, France, Spain, Japan and the USA.

Information for sellers and buyers

Assistant Commissioner Malcolm Allen said the new rules only apply to a limited number of sales of residential property under contracts entered into from 1 July 2016. Most property sales are for less than $2 million and are completely outside these rules. The withholding also does not apply to sales by Australian residents where a clearance certificate is provided to the buyer. For purchases of property with a market value of $2 million or more from a foreign resident seller, a 10 per cent withholding will be incurred on these transactions at settlement with the withheld amount being credited against any capital gains or income tax payable by the seller on the sale.

“This means Australian residents who are selling a taxable Australian property with a market value of $2 million or more need to obtain a clearance certificate from the ATO,” Mr Allen said.
“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 withhold 10 per cent of the sales price and pay this to the ATO.”

Where a buyer fails to withhold when they should, a penalty may be equal to the amount that was required to be withheld and paid. Interest will also be payable.

Sellers can claim the credit for the withheld amount paid to the ATO by lodging a tax return for the relevant year.

How to apply for a clearance certificate
Mr Allen said clearance certificate application forms are already available to download through the ATO’s website, and it is designed to be a straightforward process that should not take much time to complete for most sellers.

“Sellers can complete and lodge the form themselves, or it can be completed and lodged on their behalf by a third party, such as their solicitor or accountant,” Mr Allen said.

“There is no ATO fee for clearance certificate applications and 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 in the sale process”

An online version of the form will be available from 27 June 2016. Where an application is submitted online, most certificates will be issued electronically within a few days. Paper applications may take up to 2-4 weeks to process.

“There may be some delays in cases where applicants have incomplete tax records, for example where tax returns have not lodged for the last two years. We will follow-up where we see evidence of poor tax behaviour, just as the Australian community would rightly expect of us,” Mr Allen said.

A clearance certificate is valid for 12 months from issue, and must be valid at the time it is made available to the buyer.