Nearly half of people who responded to a recent Australian Taxation Office (ATO) social media poll said they did not know a clearance certificate is required when selling property in Australia.
This suggests many sellers may still be unaware of the foreign resident capital gains withholding (FRCGW) rules, which changed from 1 January 2025 and now apply to all property sales.
You can read our previous updates explaining these changes here:
- Selling property in 2025 – don't risk 15 per cent of your proceeds being withheld
- Name mismatches are delaying clearance certificates – don't risk 15 per cent of your sale price being withheld
- Avoid the 15 per cent surprise – Apply for your clearance certificate early
What you need to know as a seller
Under the current legislation:
- All Australian residents selling property must obtain a clearance certificate from the ATO.
- The certificate must be provided to the purchaser at or before settlement.
- If a certificate is not provided, the purchaser must withhold 15 per cent of the sale price and send it to the ATO.
These rules exist to ensure foreign residents meet their capital gains tax obligations before sale proceeds leave Australia. Australian residents do not pay the withholding amount but must provide a clearance certificate to confirm their residency status.
Apply early to avoid delays
Most clearance certificates are issued within a few days, but some can take up to 28 days to process.
Delays may occur if:
- There are outstanding tax returns
- There are unresolved matters with the ATO
- The name on the application does not match ATO records or the Certificate of Title.
Clearance certificates are valid for 12 months, so you can apply well before you accept an offer or even when you first decide to sell.
If a certificate is not provided by settlement, the purchaser must withhold up to 15 per cent of the sale price and pay it to the ATO. You can only receive a refund (if applicable) once your tax return has been lodged and processed.
To learn more or apply for a clearance certificate, visit ato.gov.au/clearancecertificate.
