The clearance certificate every seller needs

The rate, and the date it changed

The withholding is called foreign resident capital gains withholding, and the ATO says it applies to every sale of real property unless the seller is an Australian resident for tax purposes. The rate turns on the date the contract was signed. Since 1 January 2025 there has been no threshold: a modest unit is covered exactly as a large house is. A sale under $750,000 signed in 2024 had no withholding; the same sale signed in 2025 or later does, if no certificate is given.

The market value is usually the sale price. Where the price was settled between people who are not at arm’s length, such as relatives, the ATO says the buyer must get a separate valuation from a professional valuer.

The certificate, from first thought to settlement

In a private sale nobody else is watching this date for you, so here is the order the ATO’s page sets out.

1. When you start thinking of selling

   The ATO says not to wait for a contract: apply as soon as you are thinking of selling. Applications are free.

2. At least 28 days before settlement

   Processing can take up to 28 days, and the ATO says to lodge at least 28 days before settlement so the certificate arrives in time.

3. When it is issued

   The ATO confirms your residency for this withholding when you apply. Its test of residency for tax is not the same as the one used for social security or immigration. One of the ATO’s general markers of residency is six months or more in Australia without a break, spent mostly in the one job and at the one address. A certificate is valid for 12 months from the date of issue, as long as your residency status does not change in that time.

4. Before the settlement date

   Each seller gives the buyer their own certificate. The owner named on the certificate of title is the one legally required to have it, and the first and last names on the certificate must match the title or the buyer will not accept it.

5. At settlement

   If an amount has been withheld, the buyer pays it to the ATO at or before settlement.

If the certificate is missing at settlement

When selling Australian real property, if you have not provided a clearance certificate by the settlement date, the buyer must withhold an amount and pay it to the ATO. In a private sale, that is money that does not reach you on the day.

The amount is not returned at settlement. The ATO says you must lodge a tax return to have it credited to you, even if your income was below the level at which you would normally lodge. You claim the credit in the return for the income year in which the sale contract was signed, not the year of settlement: the ATO’s example is a contract signed in June 2026 that settles in August 2026, claimed in the 2025–26 return. You will need a copy of the buyer’s payment confirmation as proof of what was withheld.

Other sellers, other transfers

A seller who is a foreign resident

A seller who is a foreign resident can hold a variation notice from the ATO setting a lower rate. Without one, the buyer withholds the full rate from the price and pays it to the ATO. The main residence exemption is a separate question for a foreign resident, covered in when the main residence exemption is partial.

Moving a home within the family

The ATO’s clearance page notes that transferring property from one entity to another is a capital gains event, and that this includes family transfers. So the person transferring needs a certificate or a variation to avoid withholding. The ATO’s page also says some circumstances, covered by a legislative instrument, need no clearance certificate.

A different withholding with a similar name

GST at settlement is a separate withholding, and the ATO says the two are often confused. The notice a home seller gives about GST is covered in adjustments at settlement.

The rest of the trail

The certificate is one of the papers that decide what reaches you at settlement. The others are the buyer’s deposit, covered in where the deposit goes, and the land tax for the year, covered in land tax when you sell. The full sequence is on the home page of this guide.