Luke Howarth (Petrie, Liberal Party, Shadow Assistant Treasurer) Share this | Hansard source

On the consideration in detail, schedule 1 will modify the existing foreign resident capital gains withholding regime. One of the changes it makes removes the threshold, which is currently at $750,000 before the withholding obligation applies. The regime first started with a $2 million threshold and then went to $750,000 and above. It's now going to be on everything. The government will now remove this threshold entirely and impose the burden of compliance on everyone. As a result, schedule 1 will impose a broad compliance cost by expanding the requirement to obtain and provide a capital gains withholding clearance certificate to all Australian resident vendors disposing of taxable Australian real property. This regime was originally designed to be targeted at the higher value sales, and stretching it to cover the entire market will have some impact, if not an adverse impact.

So I put the following questions to the minister in good faith to consider. How will the minister streamline the operation of the foreign resident capital gains withholding regime to minimise the compliance burden and cost on everyday Australians? This is effectively an extra cost when selling a home, for example, that will be passed on to Australians at a time when housing is going up and the cost of living is increasing. I'm sure the Minister for Housing wants to see more people in houses. This is an extra cost. So I want to ask that. Has the minister considered alternatives which would shift the burden of compliance to foreign resident tax avoiders? In relation to foreign resident capital gains tax compliance, what other actions is the ATO taking in relation to strengthening monitoring and enforcement? Has the minister considered the impact on regional areas and parts of the country with a lower value median house price? Obviously, in regional areas the homes are of a lower value and a lot more will be affected, given that this legislation will bring it in on everything under $750,000.

Secondly, why is the schedule 1 measure described as complementary to housing affordability measures in the explanatory memorandum, when we believe it could have the opposite effect?

I ask those questions in good faith. Thank you.

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