From 1 January 2025, all Australian residents (for tax purposes) selling or disposing of Australian real property (land and buildings) must have a clearance certificate and give it to the purchaser at, or before settlement.

If a clearance certificate is not provided, 15% of the sales price (or market value if not at arm’s length) will need to be withheld (up from 12.5%).

Previously, clearance certificates were only required where the value of the property is $750,000 or more.

For foreign resident vendors, the withholding is made available as a credit against any tax liability. The vendor only receives any refund due after their next income tax return is processed at tax time.

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