If you sell Australian real property for $750,000 or more, the purchaser must withhold a portion of the price unless you, as an Australian resident, provide a valid clearance certificate. Understanding the capital gains clearance certificate process avoids unnecessary withholding and smooths settlement (see Australian residents and clearance certificates). (Australian Taxation Office)
What is foreign resident capital gains withholding?
The regime requires purchasers to withhold from payments to sellers of certain Australian assets unless the seller proves Australian tax residency or another exception applies. For residents, the solution is a clearance certificate issued by the ATO (see Foreign resident CGT withholding – overview). (Australian Taxation Office)
Who should apply and when
Australian resident vendors apply online; you can submit as soon as you plan to sell. Processing is usually quick if details match ATO records. Provide the certificate to the purchaser before settlement so no withholding occurs (see Online application form). (Australian Taxation Office)
What if you don’t get one in time?
Without the certificate, the purchaser must withhold and remit to the ATO even if you’re a resident. You can later claim the amount as a credit in your tax return, but that ties up cash unnecessarily. For paper applications or special cases, see the ATO instructions (see Paper application instructions). (Australian Taxation Office)
Other seller categories
Foreign residents may seek a variation if withholding overstates their likely tax. Special rules also apply to certain asset types beyond direct real property. The ATO’s foreign resident withholding hub covers the variations process and thresholds (see Foreign resident CGT withholding). (Australian Taxation Office)
Practical settlement checklist
- Apply for the clearance certificate early and verify title details.
- Share the certificate with your conveyancer and purchaser.
- Retain the ATO notice with your CGT records.
- If withheld, reconcile remittance statements and claim credits at tax time.
For broader CGT readiness—improvements, cost-base items, and timing—see our Property Investment Accountant guide.
Common pitfalls (and fixes)
- Mismatched data: ensure names, ABN/TFN and title match the ATO.
- Late application: build the step into your pre-sale timeline.
- Assuming it’s optional: withholding applies automatically without a certificate.
With a timely capital gains clearance certificate, resident sellers avoid cash being withheld and keep settlement funds intact—while remaining fully compliant with the ATO’s regime. (Australian Taxation Office)
General information only – seek professional advice before acting.
