Disclaimer: The following is for informational purposes only. It is not intended to constitute legal advice, or to recommend a course of action, and does not create an attorney-client relationship between the reader and Renuka Somers, or Somers Tax Law, PLLC.
From 1 January 2025 onwards, changes apply to the Australian Foreign Resident Capital Gains Withholding (FRCGW) rules, with respect to property sale contracts signed on or after this date.
From 1 January 2025 onwards, buyers are required to withhold and remit FRCGW at 15% of the sale price (or market value, in a non-arm’s length sale), in the absence of an ATO variation notice.
These rules apply:
- To “taxable Australian property” (TAP), being direct and indirect interests in Australian real estate, including leases.
- Regardless of whether the seller is a foreign resident (or foreign entity)
- Regardless of the sale price or market value of the property
For contracts signed before 1 January 2025 (and regardless of whether settlement occurs after 1 January 2025), purchasers are required to withhold 12.5% FRCGW from the sale price, where the sale price/market value of property sold by a foreign resident vendor is AUD $750,000 or more.
Renuka Somers
