The Australian Government has recently made changes to the rules relating to Foreign resident capital gains withholding (FRCGW). These changes came into effect on 1 January 2025.

I wrote about this in 2017, when the last changes were made.  See here: https://www.noosa4sale.com.au/post?post_id=9484

Under the previous rules, if a property in Australia was sold for $750,000 or more, the seller/s had to provide an ATO clearance certificate to the buyer/s before settlement. Otherwise, an amount equal to 12.5% of the purchase price was withheld at settlement and paid to the ATO for FRCGW. 

From 1 January 2025:

• the withholding rate will increase from 12.5% to 15%; and
• the $750,000 property value threshold will be removed, and the withholding rules will apply to all property sales.

This means that all seller/s selling property in Australia regardless of the property value, will be required to provide an ATO clearance certificate to the buyer/s before settlement. Otherwise, the buyer is required to withhold 15% of the purchase price to be paid to the ATO at settlement.

The changes apply to contracts entered into on or after 1 January 2025. 

Apply for your certificate here: https://www.ato.gov.au/single-page-applications/frwt-certificate