Foreign residents selling property in Australia
Foreign resident capital gains withholding (FRCGW) of 12.5% applies for all property sales of $750,000 or more.
.
Foreign resident capital gains withholding (FRCGW) of 12.5% applies for all property sales of $750,000 or more. At a minimum, that is $93,750 being withheld from the sale and paid to the ATO, unless there is an approved variation.
The most common reasons why a seller may apply for a variation include:
- making a capital loss
- not having an income tax liability
- foreclosure.
In 2023 over 60% of applications for variations were lodged late, affecting settlement. When your clients are too late applying, the conveyancer or solicitor has no choice but to withhold 12.5%.
Tips
- Include the sales contracts with the variation application.
- Variations must be lodged online at least 28 days before property settlement to ensure processing time.
- The main residence exemption doesn't apply to foreign residents.
- Australian residents for tax purposes must have a clearance certificate before settlement to prove their residency for tax purposes, so no withholding occurs.
Find out more about FRCGW variations and clearance certificates needed for Australian residents.
ATO
7 March 2024
ato.gov.au
Hot Issues
- Businesses ghosting the ATO targeted in debt collection blitz
- Claiming the tax-free threshold: getting it right
- Aussies tired of ‘dodgy tax criminals’, warns ATO
- Protect your small business by following these essential steps.
- Super guarantee a focus area for ATO business debt collection
- Controversial ‘Airbnb tax’ set to become law
- Withholding for foreign residents: an ATO focus area
- 1 in 3 crypto owners confused about tax, study reveals
- 20 Years of Silicon Valley Trends: 2004 - 2024 Insights
- ATO reveals common rental property errors from data-matching program
- New SMSF expense rules: what you need to know
- Government releases details on luxury car tax changes
- Treasurer unveils design details for payday super
- 6 steps to create a mentally healthy and vibrant workplace
- What are the government’s intentions with negative gearing?
- Small business decries ‘unfair’ payday super changes
- The Leaders Who Refused to Step Down 1939 - 2024
- Time for a superannuation check-up?
- Scam alert: fake ASIC branding on social media
- Millions of landlords the target of expanded ATO crackdown
- Government urged to exempt small firms from TPB reforms
- ATO warns businesses on looming TPAR deadline
- How to read a Balance Sheet
- Unregistered or Registered Trade Marks?
- Most Popular Operating Systems 1999 - 2022
- 7 Steps to Dealing With a Legal Issue or Dispute
- How Do I Resolve a Dispute With My Supplier?
- Changes to Casual Employment in August 2024
- Temporary FBT break lifts plug-in hybrid sales 130%
- The five reasons why the $A is likely to rise further - if recession is avoided
- June quarter inflation data reduces risk of rate risk