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Checked 7 October 2026

Selling an Australian property from overseas: the clearance certificate and 15% withholding

When you sell Australian property, the buyer must hold back 15% of the price and pay it to the ATO unless you are an Australian resident for tax and give the buyer an ATO clearance certificate before settlement. The 15% rate applies to all property values from 1 January 2025. An expat who is still an Australian tax resident can obtain a certificate. A foreign resident cannot, and can ask the ATO for a withholding variation instead. This guide reflects the ATO's pages as at 7 October 2026.

The ATO says applications for a clearance certificate must be lodged at least 28 days before settlement. Variations can also take up to 28 days.

How the withholding works

Under the foreign resident capital gains withholding rules, the buyer pays the ATO at or before settlement the amount they withhold from the price. The ATO's overview says a rate of 15% applies to the value of all property from 1 January 2025. Older material that mentions a $750,000 threshold describes the system before that date.

The withholding is not the final tax. If an amount was withheld because you did not give the buyer a certificate, the ATO says you must lodge a tax return to have it credited to you. The tax you owe on the sale is worked out in that return.

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Who can get a clearance certificate

Clearance certificates are for Australian residents for tax purposes. The ATO's residency criteria include a person who goes overseas temporarily and does not set up a permanent home in another country. The four residency tests decide whether that describes you. Citizenship is not the test.

A foreign resident vendor cannot get a certificate. The vendor declarations the ATO offers cover sales of assets other than taxable Australian real property, so they do not replace a certificate on a house or land sale.

How to apply

  • Who applies. The vendor, or an Australian legal practitioner or registered tax agent acting for the vendor. Conveyancers cannot apply on a vendor's behalf, though they can help a client complete and submit the online form.
  • Where. The ATO has an online application, and a paper form with instructions is also available.
  • When. At least 28 days before settlement.
  • Joint owners. Each person on the title needs their own certificate and gives their own to the buyer.
  • Validity. 12 months from issue, as long as your residency status does not change in that time.
  • Handing it over. Each vendor must give the certificate to the buyer before settlement.

The ATO says some circumstances are covered by a legislative instrument that means no certificate is needed.

If you are a foreign resident

A foreign resident vendor cannot obtain a certificate, but the ATO lets them apply for a variation when 15% is too high compared with their estimated Australian tax. That applies where there is no capital gain, or where a rate between 0% and 15% fits, for example because of losses. The ATO says to lodge as soon as the contract is signed, that variations take up to 28 days, and that the variation notice has to reach the buyer at or before settlement. With a variation in place, the buyer withholds at the reduced rate.

Worked example

Assume a $1,000,000 sale and a seller who is a foreign resident, was a foreign resident for the whole time they owned the property, bought it after 8 May 2012 for a total cost base of $700,000, has no other Australian income, and does not meet the life events test for the main residence exemption.

  1. Amount withheld at settlement with no variation: 15% x $1,000,000 = $150,000. The seller receives $850,000 before other settlement costs.
  2. Capital gain: $1,000,000 - $700,000 = $300,000. The ATO says a foreign or temporary resident who was one throughout ownership gets no CGT discount.
  3. Tax on the gain at 2026-27 foreign resident rates: $60,850 + 45% x ($300,000 - $190,000) = $60,850 + $49,500 = $110,350.
  4. Credit and refund: $150,000 withheld - $110,350 tax = $39,650 refunded when the return is assessed.

With a variation, less might be held back at settlement. A resident seller with a certificate has nothing withheld, and pays any CGT through the usual return. The scale for foreign residents is in the foreign resident tax rates guide.

Order of events

  1. The contract is signed.
  2. A resident vendor applies for a certificate, at least 28 days before settlement. A foreign resident vendor applies for a variation as soon as the contract is signed.
  3. The certificate or variation notice reaches the buyer at or before settlement.
  4. The buyer pays any withheld amount to the ATO at or before settlement.
  5. The vendor lodges an Australian tax return, which credits any amount withheld.

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Frequently asked questions

Do I need a clearance certificate if I am an Australian citizen living overseas?

Only residency for tax matters. If you are an Australian resident for tax purposes, a certificate lets you avoid the withholding. If you are a foreign resident, you cannot get one. See the main residence exemption guide for how a sale is taxed.

What if I do not give the buyer a certificate?

The ATO says the buyer must withhold up to 15% of the sale proceeds. If an amount was withheld, you must lodge a tax return to get it credited to you. The tax on the sale is worked out in that return, so the amount withheld is a credit and not an extra charge. The buyer must pay the withheld amount to the ATO at or before settlement.

Can my conveyancer apply for me?

No. The ATO says conveyancers cannot apply for a clearance certificate on a vendor's behalf, though they can help you complete the online application. Australian legal practitioners and registered tax agents representing the vendor can apply, and so can the vendor. Because applications must be lodged at least 28 days before settlement, the application needs to start early in the sale.

Does the 15% apply to cheaper properties?

Yes. From 1 January 2025 the ATO applies 15% to the value of all property, so the old value thresholds no longer apply. A $400,000 sale by a foreign resident with no certificate or variation would have 15% x $400,000 = $60,000 withheld at settlement.

How long is a clearance certificate valid?

12 months from the date of issue, as long as your residency status does not change during that time. Each owner on the title has a separate certificate, and each must give theirs to the buyer before the settlement date. A certificate applies only while your tax residency is unchanged, so a move that changes your residency status is worth raising with a tax agent before settlement.

Sources

Checked 7 October 2026.

Expat Finance is an independent guide. It is not a lender, mortgage broker or credit provider, it does not hold an Australian credit licence, and it does not give credit, legal, tax or migration advice. It is not affiliated with any bank, the ATO or the Foreign Investment Review Board. General information only, not legal, tax, migration or financial advice.