If You’re Selling Property This Affects You - Big Changes to Foreign Resident Capital Gains Withholding (FRCGW)

FRCGW is designed to ensure tax liabilities owed by non-residents selling Australian properties are collected. From 1st January 2025, significant changes to these rules will take effect:

• The $750,000 threshold is removed—it now applies to all properties, regardless of the sale price.

• The withholding rate increases from 12.5% to 15%.

What Does This Mean for You as the Vendor?

If you’re an Australian resident selling property, you must provide a clearance certificate from the ATO by settlement. Without it:

• 15% of the sale price will be withheld by the purchaser and paid to the ATO.

• Refunds will only be processed after you lodge your income tax return.

Key Points About Clearance Certificates

• Apply early—most certificates issue within a few days, but some take up to 28 days. You don’t need to wait until you’ve sold the property.

• Certificates are valid for 12 months and can cover multiple property sales within that period.

• There’s no fee to apply.

• Ensure your name on the certificate matches the name on the property title. If there’s a mismatch, before applying for the certificate:

• Log into your myGov account to update your details.

• Alternatively, speak with your Accountant to amend the information.

• If your name has changed due to marriage, provide a copy of your Marriage Certificate to your Conveyancer as evidence.

Exemptions

If you sold a property under $750,000 with a contract dated before 1st January 2025, the previous rules apply—no certificate is needed.

Moving Forward

At Tuckfields Conveyancing, we’ll email all our Vendor clients the ATO link to apply for a clearance certificate as soon as we receive your contract.

For more details, visit the ATO’s guide: Capital gains withholding: Impacts on foreign and Australian residents.

Here’s the link to apply for a certificate:  Application clearance certificate

Samantha Phillips

Director