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Thursday, 15 June 2017
Page: 6643

Mr SUKKAR (DeakinAssistant Minister to the Treasurer) (12:27): Firstly can I thank all members who have contributed to the debate. If you were listening to members opposite you may not have gathered that they are actually supporting this bill, but we thank them, nonetheless, for that support.

The government's 2017-18 budget measures represent our commitment to reducing pressure on housing affordability and ensuring that home ownership is more achievable for all Australians. The budget measures contain changes which, in this respect, ensure that foreign residents disposing of Australian property comply with their Australian tax obligations. With the Treasury Laws Amendment (Foreign Resident Capital Gains Withholding Payments) Bill 2017 the government is introducing changes to the existing foreign resident capital gains tax withholding regime. The first change increases the withholding rate from 10 per cent to 12½ per cent. The second change reduces the threshold, as it currently stands, from property with a market value of $2 million or more to property with a market value of $750,000 or more, thereby capturing vastly more properties.

From 1 July 2017 a purchaser of certain Australian property that has a market value of $750,000 or more will have to withhold that 12½ per cent of the purchase price and pay it to the Commissioner of Taxation if they purchased the property from a foreign resident. Combined with other integrity measures announced in this year's budget relating to the taxation of foreign investors in residential housing, this bill will contribute a gain to revenue over the forward estimates period of $570 million. The other associated capital gains tax changes will be introduced later as part of a separate bill to enable consultation on those aspects of policy to occur.

An education campaign is being undertaken by the Australian Taxation Office to raise awareness of the changes. The campaign includes presentations in major Australian cities, an online webinar and collaboration with stakeholders that assisted in raising awareness when the regime was introduced, including the Real Estate Institute of Australia, the Australian Institute of Conveyancers, law societies, and various state and territory regulators.

These changes have been designed to encourage more foreign residents to comply with their tax obligations and lodge tax returns. They are an important step for Australia in improving housing affordability and strengthening the integrity of Australia's tax system. I therefore commend the bill to the House.

The DEPUTY SPEAKER ( Mr Vasta ): The original question was that this bill be now read a second time, to which the honourable member for Fenner has moved an amendment that all words after 'that' be omitted with a view to substituting other words. The immediate question is that the amendment be agreed to.

Question negatived.

The DEPUTY SPEAKER: The question now is that the bill now be read a second time.

Question agreed to.

Bill read a second time.

Message from the Governor General recommending appropriation announced.