Foreign Resident Capital Gains Withholding - How to Get Your Certificate

The foreign resident capital gains withholding (FRCGW) threshold applies for all real property disposals where the contract price is $750,000 and above. The 12.5% FRCGW withholding tax rate applies to all contracts entered into on or after 1 July 2017.

What do you have to do as a seller?

• If you are an Australian resident for tax purposes, obtain a clearance certificate from the ATO prior to settlement to ensure you don’t incur the tax withheld.
• Apply online HERE
• Apply at least 14 days prior to requiring it.
• A clearance certificate is valid for 12 months from the date of issue.
• Where there are multiple vendors disposing of the asset, each vendor should apply for a separate clearance certificate.
• If you are a foreign resident, you may be able to apply for a variation of the withholding rate. Speak to your solicitor for more information.

What do you have to do as a purchaser?

• If a clearance certificate is not provided at settlement time, you are responsible for paying the 12.5% withheld amount to the Commissioner of Taxation.
• Complete the purchaser payment notification form online HERE

For additional information, please visit www.ato.gov.au or give your solicitor a call.