Navigating Foreign Resident Capital Gains Tax Withholding on Australian Property (Feb 25 Tax Update)

Relevant For:

Anyone selling real estate in Australia.

Key Points:

• From 1 January 2025, the foreign resident capital gains tax withholding (FRCGW rate increases to 15% on all property contracts.
• Australian resident sellers must secure a clearance certificate to avoid mandatory withholding.
• Foreign residents cannot obtain clearance certificates and must apply for a variation if eligible.
• Non-arm’s length transactions require an independent market valuation.
• Early action is crucial to prevent delays and unexpected tax withholdings.

Full Article:

With the changes effective from1 January 2025, all contracts for the sale of Australian property now attract a foreign resident capital gains tax withholding (FRCGW) rate of 15%, with no threshold exemption.

This adjustment means that unless a