FRCGW Clearance Certificate: IMPORTANT CHANGE FOR SELLERS
From 1 January 2025 all property sellers in Australia will require a Foreign Resident Capital Gains Clearance Certificate (“ATO Clearance Certificate”), irrespective of the property’s value (this was previously $750,000), to avoid a withholding payment of 15% of the sale price to the Australian Taxation Office as part of the settlement proceeds.
To avoid settlement delays, it’s crucial that all sellers lodge an application for an ATO clearance certificate promptly as processing times vary and can take up to 28 days.
The ATO clearance certificate is essential for Australian resident vendors to verify their tax residency and confirms that the Foreign Resident Capital Gains Withholding (“FRCGW”) which is 15% of the sale price does not apply.
By securing your clearance certificate early you will receive the full proceeds without unnecessary the FRCGW amount being paid to the Australian Taxation Office.
To fill in the ATO Clearance Certificate form, simply follow this link:
https://www.ato.gov.au/forms-and-instructions/capital-gains-withholding-clearance-certificate-for-australian-residents-online-application
Should you have any further questions regarding this topic, please don’t hesitate to contact our experienced conveyancing lawyers and solicitors at Spot On Conveyancing. We are here to help you.