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If you're planning to sell property in 2025, there are important changes to the ATO Clearance Certificate rules that you need to know about! These updates affect ALL Australian residents selling property, and they could impact your transaction.

Here’s what’s changed:
As of January 1, 2025, the rules for foreign resident capital gains withholding have been updated, and it’s essential to understand the new requirements:

1. 15% Withholding Tax:
   If the property you’re selling is valued at $750,000 or more, 15% of the purchase price will be withheld by the ATO if you don’t provide a Clearance Certificate.
   (Previously, this only applied to properties valued over $750,000, and the withholding was 12.5%. Now, the 15% withholding applies to ALL properties.)
2. Clearance Certificates are Now Mandatory:
   ALL Australian residents selling property need to provide a clearance certificate from the ATO before settlement. If you don’t provide this certificate, 15% of the sale price will be withheld, and you’ll only get it back when you lodge your next tax return! 😬
3. Timing is Crucial:
   Most clearance certificates can be issued within a few days, but it’s best to apply early—it can take up to 28 days in some cases. If you’re selling property, apply for the certificate as soon as possible to avoid delays.

 ✅ The clearance certificate process is typically handled by your solicitor during the contract stage. They will organise the application for you and ensure it’s submitted to the ATO before settlement. 

How to Apply for an ATO Clearance Certificate
If you’re selling property in Queensland, visit the official ATO website to apply for the clearance certificate:
👉 Apply for an ATO Clearance Certificate https://www.ato.gov.au/single-page-applications/frwt-certificate

Why It’s Important
This new rule is in place to help the ATO collect taxes owed by non-residents selling Australian property. So, it’s important for ALL sellers to understand and follow these steps to avoid withholding tax that could take a while to be refunded.

Make Sure You’re Prepared!
If you’re thinking of selling property this year, don’t wait until the last minute to get your clearance certificate. It could cause delays and issues at settlement, which is the last thing you want when making a property sale.

Disclaimer:
The information provided in this blog is for general informational purposes only and does not constitute legal or financial advice. Please consult a qualified professional for advice on your specific situation.