Foreign Resident Capital Gains Withholding (FRCGW): Changes for 2025

From 1 January 2025, changes to the Foreign Resident Capital Gains Withholding (FRCGW) rules have come into effect.

Key Changes to the FRCGW

The changes apply to contracts entered on or after 1 January 2025. This means the withholding rules will now apply to all property sales, regardless of the sale price.

All Australian resident sellers are now required to obtain a Clearance Certificate from the ATO to avoid the withholding tax. If a Clearance Certificate is not provided by settlement, the purchaser must withhold 15% of the purchase price and pay it to the ATO.

If an amount is incorrectly withheld from the sale price, the seller will only receive a refund after their next tax return is processed. Therefore, it’s important to apply for a Clearance Certificate as soon as possible.

For foreign residents, understanding the new withholding rate and the removal of the property value is crucial. If you are planning to sell, contact your Advisor to discuss how these changes may affect your tax obligations.

For More Information

If you need any assistance with applying for an ATO Clearance Certificate, or any further information, please contact an Archer Gowland Redshaw adviser on (07) 3002 2699 | info@agredshaw.com.au