Sale of Property by Foreign Resident

I bought a property in 2000 as my main residence, then I moved to the US and permanently lived there on 1 January 2013. I started to rent out the property on 1 January 2013 until the property was sold in 2017.  

 

As a foreign resident, can I apply for a clearance certificate from the ATO to avoid the 10% withholding tax? In regards to the calculation of CGT on the sale of the property, please advise whether I can use the market value on the date which I started to rent out the property (i.e. 1 January 2013) as the cost base rather than the original cost of the property?  

 

The new foreign resident withholding rules are targeted specifically at non-resident vendors, so a clearance certificate will not be available. The practical effect of the new rules is that a withholding obligation will arise in relation to all purchases of Australian property with a market value of $2 million or more regardless of the vendor's residency for tax purposes. Australian residents, however, may apply for a clearance certificate to exempt them from the requirement to withhold. The rule in s 118-192(2) provides that the market value is determined at the time when the property generates income for the first time. Therefore,  the market value on 1 January 2013 will be used as the cost base on disposal rather than the original cost.