If you’re selling a property in Australia as an Australian resident, be aware of an important change: you now need an ATO Clearance Certificate for every property sale to avoid the buyer withholding 15% of the sale price at settlement.
What’s Changed?
Previously, the ATO Clearance Certificate was only required for properties valued at $750,000 or more, with a withholding rate of 12.5% on amounts above this threshold. As of 2025, this has changed:
- All property sales now require a certificate.
- The withholding rate has increased to 15% of the total sale price.
What is an ATO Clearance Certificate?
This certificate confirms you are an Australian resident for tax purposes and that you are not subject to foreign resident capital gains tax.
Why is it Important?
If you cannot provide the buyer with the clearance certificate on settlement day, they are legally required to withhold 15% of the sale price and remit it to the ATO. Without the certificate, you’ll have to wait until your next tax return is processed to claim a refund.
Key Points to Remember:
- Each seller must have their own clearance certificate.
- Apply for the certificate at least 28 days before settlement to avoid delays.
At Pacific Law, we take care of this process for you as part of your property sale. Contact us at pacificlaw.com.au to discuss your individual circumstances and how this change may affect you.
