All Aussie residents selling property are now required to get a clearance certificate from the ATO, or a portion of their sale price will be withheld.
Aussies who are thinking of selling property this year are being urged to be aware of a major tax change that could impact their hip pocket if they’re not careful. The Australian Taxation Office (ATO) changed foreign resident capital gains withholding rules on January 1, but the new rules impact all Aussies.

From January 1, all Aussie residents selling property will need to obtain a clearance certificate from the ATO to declare they are residents for tax purposes. If they don’t, the buyer is required to withhold 15 per cent of the sale price and pay it straight to the ATO.
If you find yourself in this situation, the ATO said you will have to wait until you lodge your next tax return to get that money back as a refund.
With the average home valued at $814,837 across Australia, 15 per cent withholding would equate to around a $122,225 hit – a significant chunk of cash to be without until you do your taxes.
Clearance certificates are free to obtain and the ATO has recommended Aussies apply for one as soon as they are thinking of selling.
“Most clearance certificates will issue within a few days, but it is important to apply early because some can take up to 28 days to issue,” the ATO said.
“They are valid for 12 months, so the vendor doesn’t need to wait until they have signed a contract.”
The foreign resident capital gains withholding (FRCGW) is used by the ATO to ensure non-residents pay their tax liabilities when selling property.
Previously, those selling property only had to provide a clearance certificate where the value of the property was $750,000 or more.
Under the changes, this $750,000 threshold has been scrapped and the withholding rate has been increased from 12.5 to 15 per cent.
How do I get a clearance certificate?
Aussies can get a clearance certificate through the ATO website.
Tax Invest Accounting director Belinda Raso recommended people thinking of selling this year get organised and get the certificate now.
“This is free to organise, it just needs to be in the vendor’s name and it’s valid for 12 months,” she explained.
“If you don’t actually proceed with the sale, it doesn’t mean anything that you actually have that certificate, you don’t have to proceed.
“Normally this is handled by your conveyancer or solicitor but why not get organised now.”
The changes apply to contracts entered into on or after January 1, 2025.
Article Courtesy of: Yahoo News