Major ATO Tax Change for Property Sellers from Jan 1

All Aussie residents selling property are now required to get a clearance certificate from the ATO, or a portion of their sale price will be withheld!

From January 1, 2025, Australians selling property must obtain a Clearance Certificate from the Australian Taxation Office [ATO] to confirm they are residents for tax purposes.

Failing to do so will require buyers to withhold 15% of the property sale price and remit it directly to the ATO.

Key Changes

• The previous $750,000 property value threshold has been removed, making the rules applicable to all property sales.
• The withholding rate has increased from 12.5% to 15%.
• Sellers without a clearance certificate will have the withheld amount refunded only after filing their next tax return.

With the average Australian home valued at $814,837, sellers without a certificate could face a temporary withholding of approximately $122,225.

Obtaining a Clearance Certificate

Clearance certificates are free and can be applied for through the ATO website.

The ATO recommends applying early, as processing may take up to 28 days, though most are issued within a few days.

Certificates are valid for 12 months and can be obtained before a sale is initiated or finalised.

These changes aim to ensure non-residents meet their tax obligations and apply to contracts signed on or after January 1, 2025.

>> You can read more details on the ATO website HERE

As always, we’re here to help – so email us or call 08 8451 1500 should you have questions.

Cheers,

Sam, Matt & Team
Urbantech Finance

PS. Start the new year on the front foot – sign up for our NEW RateTraker loan tool and find out if you’re on the best deal [lowest rate] with your current lender!