Foreign Resident Capital Gains Withholding

Definition

FRCGW requires purchasers to withhold 15% of the purchase price at settlement for any Australian property sale — and remit it to the ATO — unless the vendor provides a valid clearance certificate. Since 1 January 2025, the previous $750,000 threshold was removed, meaning every property sale is now captured.

If you're an Australian resident selling your home or investment property and you don't lodge a clearance certificate before settlement, the buyer must withhold 15% of the price. On a $800,000 property, that's $120,000 locked with the ATO until you lodge a return proving you're a resident. The certificate is free and takes about 28 days.

You sell your Sydney investment unit for $750,000. Without a clearance certificate, the buyer withholds $112,500 and sends it to the ATO. You won't get it back until you lodge your tax return months later.

TAA 1953, Subdivision 14-D — View on ato.gov.au →

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