If you’re selling property in Australia, it’s important to remember: every single sale now requires an ATO Clearance Certificate.
Prior to 1 January 2025, these certificates were only a concern for property sales of $750,000 or more. However, the threshold has since changed, and all property sales—regardless of the sale price—must have a clearance certificate issued by the Australian Taxation Office (ATO) before settlement.
Why does this matter?
The clearance certificate confirms that the seller is not a foreign resident for tax purposes. If a valid certificate isn’t provided, the buyer is legally required to withhold 15% of the purchase price and remit it to the ATO.
This can create unnecessary delays or financial complications at settlement if it’s not handled early.
What should sellers do?
- Apply early. Clearance certificates can take up to 28 days to process.
- Speak to your lawyer or conveyancer. They’ll usually apply on your behalf or assist you through the process.
- Don’t leave it to the last minute. Delays in getting the certificate could delay settlement or cause funds to be withheld unnecessarily.
If you’re preparing to sell, get in touch with us early to make sure your ATO obligations are covered from day one.
For further information, please refer to https://lynchlaw.com.au/foreign-resident-capital-gains-withholding-tax-2025/.
