ARTICLE · 03 MARCH 2025

Changes in the Foreign Resident Capital Gains Withholding

Bennett & Philp Lawyers

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Sellers to obtain a clearance certificate or variation as soon as you think about selling.

AustraliaTax

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The Foreign Resident Capital Gains Withholding Tax Regime applies to sellers disposing of Taxable Australian Property and Real Property. This includes assets such as residential and commercial properties, leases over real property, vacant land and rights in relation to minerals, petroleum or quarry materials. The system supports the collection of tax owed by foreign residents, however, requires all Australian residents and citizens to provide a clearance certificate confirming tax does not need to withheld and paid to the ATO. From 1 July 2016, sellers have been required to provide Buyers with a valid ATO Clearance Certificate, where the contract price is over $750,000, evidencing that the Buyer is not required to withhold any amount. The applicable tax rate prior to 1 January 2025 was 12.5%.

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