Important changes to Foreign Resident Capital Gains Withholding rules for property sales.
Published on Monday 09 December, 2024 by Beck Andersen
In December 2023, the Federal Government proposed changes to the Foreign Resident Capital Gains Withholding (FRCGW) regime. The legislation has now passed, and the changes will apply to all contracts entered into on or after 1 January 2025.
The new legislation is designed to capture foreign investors; however, all vendors, regardless of citizenship, will be required to apply for the clearance certificate. You can apply for the certificate online by visiting the following link: ATO Foreign Resident Capital Gains Clearance Certificate. You will need your Tax File Number (TFN) to complete the application.
Once you apply online, the clearance certificate will be sent to you via email or to your MyGov account.
You can request the clearance certificate prior to the property being sold, and it is recommended that you complete the application as soon as possible. Clearance Certificates are valid for 12 months, so it’s advisable to apply early to avoid any delays at settlement.
Australian residents/taxpayers: what you need to know
Once you receive your clearance certificate from the Australian Taxation Office (ATO), it must be forwarded urgently to your Conveyancer or Lawyer to comply with the new legislation.
If a certificate is not produced before settlement, the purchaser is required to withhold 15% of the sale price and remit this amount to the ATO at settlement.
For more information, visit the ATO website:
Foreign Resident Capital Gains Withholding Information
Foreign residents need to note:
The changes to the legislation will result in an increase in the withholding rate from 12.5% to 15%.
Foreign residents may also request a variation to reduce the withholding rate. To do so, you should speak with your accountant, who will apply directly to the ATO on your behalf.
How can we help?
Navigating these new FRCGW changes can be challenging, especially if you’re unfamiliar with the updated requirements. Our experienced property and conveyancing team is here to assist you in understanding these changes and ensuring your property transaction proceeds smoothly. For more information or assistance, please contact us on 8231 1110 or get in touch online.
Author
Beck Andersen
Senior Conveyancer
Found this helpful? Share it!
Read our news and ideas by Practice Area
- Aboriginal land rights
- Agricultural law
- Asbestos claims
- Car accident claims
- Commercial and property law
- Contested wills and estates
- Conveyancing
- Criminal law
- Defamation
- Employment law
- Estates
- Family law
- Injury claims
- International law
- Litigation and dispute resolution
- Public liability
- Renewable energy law
- Super TPD
- Wills and succession planning
- Workers' compensation
Related posts...
Your guide to workers’ compensation claims
If you or a loved one has been injured at work, it can be challenging to navigate a workers’ compensation claim – especially during recovery. Keep reading to learn about your legal rights and entitlements.