ATO Clearance Certificates: Overview and Recent Changes

If you are involved in any sale or purchase of property, you should be aware of the Australian Taxation Office (ATO) Clearance Certificate requirements.

An ATO Clearance Certificate confirms a property seller is an Australian resident for tax purposes, preventing the buyer from withholding part of the purchase price under the Foreign Resident Capital Gains Withholding (FRCGW) tax. Without the certificate, the buyer must withhold and remit a portion to the ATO. The FRCGW tax ensures foreign sellers meet their tax obligations, with ongoing changes affecting both foreign and Australian sellers.

From January 1, 2025, the withholding rate will increase from 12.5% to 15%, and the $750,000 threshold will be removed and therefore applicable to all property sales.

Property transactions can be complex, with significant legal and tax implications. Having expert conveyancing services is crucial in understanding your obligations and avoiding costly mistakes.

Our experienced Legal team is here to guide you through every step, including obtaining an ATO Clearance Certificate and managing all conveyancing requirements, ensuring your transaction is smooth, efficient, and fully compliant.