Revised laws on the taxation of capital gain on the sale of “Taxable Australian Real Property” (TARP) by foreign residents has passed through parliament, backdated to the 1 January 2025.
Under the existing laws, foreign residents have 12.5% withheld from the sale of their properties which exceed $750,000.
The new laws have increased the Foreign Resident’s Capital Gains Withholding (FRCGW) rate to 15% and removed the $750,000 threshold.
As a result, all vendors selling property are subject to the Foreign Resident’s Capital Gains Withholding requirements.
Every property sale will require a Clearance Certificate.
The main implication of this change will be the effect on foreign residents who may not have sufficient funds to meet their tax obligations.
Variations to the Foreign Resident’s Capital Gains Withholding are complex and can be submitted to the Australian Tax Office. We have proven experience with the submission of these variations.
If you are a non-resident or a resident and wish to understand the tax implications when purchasing property, do not hesitate to contact our office.
