ATO Capital Gains Clearance Certificate for Sellers

The Government has imposed the following regulations:

All contracts entered into from 1 July 2016 with a contract price of $2 million and above – imposes an obligation on buyers to withhold 10% of the purchase price of a property and pay it to the Australian Taxation Office

All contracts entered into from 1 July 2017 with a contract price of $750,000 and above – imposes an obligation on buyers to withhold 12.5% of the purchase price of a property and pay it to the Australian Taxation Office

If your property price falls into this category a clearance certificate is required to be provided prior to settlement.

Each seller, which appears on a Certificate of Title, must arrange for their own clearance certificate.

Clearance certificates are required to be provided prior to settlement or you will be receiving a 10%  or 12.5% (depending on your contract date) reduction in funds provided at settlement from the buyer, as the buyer is obligated to pay it  to the Australian Taxation Office.

Please find below the link to complete your electronic Clearance form:

https://www.ato.gov.au/FRWT_Certificate.aspx

Please note that as settlement agents, we are unable to complete this form for you.

Once received, please forward this Clearance Certificate to our office so that we may provide it to the buyer.

For further information regarding the above, please visit: https://www.ato.gov.au/General/New-legislation/In-detail/Direct-taxes/Income-tax-for-businesses/Foreign-resident-capital-gains-withholding-payments/