
SELLING PROPERTY IN 2025?
You Need to Apply for a Clearance Certificate
For Australian Residents planning to sell or dispose of Australian property, e.g. your principal place of residence, an investment property or land, you must provide a Clearance Certificate to the Purchaser at or before settlement to avoid Foreign Resident Capital Gains Withholding (FRCGW).
Rate of Foreign Resident Capital Gains Withholding (FRCGW)
From 1 January 2025, the Australian Taxation Office (ATO) adjusted their rulings for Foreign Resident Capital Gains Withholding.
The following rates apply to the market value of property contracts signed:
– Up to and including 31 December 2024, a rate of 12.5% applies to a property valued at $750,000 or more.
– On or after 1 January 2025, a rate of 15% applies to the value of all property
When to Apply for a Clearance Certificate
While most Clearance Certificates are processed and issued within a few days, the processing and issuing can be delayed by 28 days. If your property settles before your Clearance Certificate is issued, 15% of the sale price must be withheld and you cannot receive this until your Income Tax Return is lodged and your refund processed.
As an example, if you sold your property for $600,000, with settlement occurring on 10 January 2025, and you did not provide a Clearance Certificate on or before the settlement date, 15% of the sale price ($90,000) would be withheld. This amount would only become accessible after you lodge your 2025 Tax Return (post-1 July 2025), and your refund is processed.
Clearance Certificates are valid for 12 months from the date of issue, so if you intend to sell property this year, we recommend applying for your Clearance Certificate now.
Applying for a Clearance Certificate
You can apply for a Clearance Certificate online by following the link below:
Clearance Certificate Application for Australian Residents
Alternatively, you can complete a paper application and post it to the Australian Taxation Office (ATO).
Clearance Certificate Application for Australian Residents – Paper Application
If you require assistance completing a Clearance Certificate application, please do not hesitate to contact our office on 0416 919 036.