If you’re thinking about selling a property in Australia from 1 January 2025, there’s a big change coming that could affect how much money you walk away with at settlement. Thanks to an update from the Australian Tax Office (ATO), every property seller will now need to apply for a clearance certificate—and if you don’t, the ATO will hold onto 15% of your sale price until you lodge your next tax return.
Yes, you read that right. Even if you’re an Australian citizen selling your own home, this new rule applies to you.
What’s Changing and Who’s Affected?
Previously, this rule only applied to foreign residents selling property in Australia. But from 1 January 2025, it’s going to affect all property sellers who are Australian tax residents as well.
If you sell a property for $750,000 or more, you must get a clearance certificate from the ATO before settlement. Without it, the buyer is legally required to withhold 15% of the sale price and send it directly to the tax office.
For example, if you sell your home for $900,000 and don’t have the clearance certificate in time, you won’t see $135,000 of that money until you do your next tax return. That’s a long wait if you need the funds right away for another home, retirement, or investment plans.
How to Get a Clearance Certificate from the ATO
Luckily, applying for a clearance certificate isn’t complicated—and it’s free. But it’s something you need to sort out early, as processing can take up to 28 days.
Steps to Apply:
- Visit the ATO website and fill out the online application form.
- Enter your details, including your tax file number, personal information, and property address.
- Submit the form and wait for approval.
- Once approved, you’ll receive your clearance certificate via email.
The certificate is valid for 12 months, so if you’re thinking about selling in the next year, you can apply before even listing your property.
What Happens If You Don’t Have a Clearance Certificate?
If settlement day arrives and you haven’t provided the clearance certificate, 15% of the sale price will be withheld. That means:
- You’ll need to wait until your next tax return to claim the money back.
- There will be more paperwork as you go through the process of getting a refund.
- Your financial plans could be delayed, especially if you were relying on those funds for another property or investment.
For many sellers, having a large chunk of money tied up for months isn’t ideal, so sorting out the certificate ahead of time is the best way to avoid unnecessary stress.
Who Needs to Apply?
Anyone selling Australian property worth $750,000 or more must apply. This includes:
- Individual homeowners (including Australian citizens and permanent residents)
- Companies and trusts selling property
- Joint owners (each seller must get their own certificate)
If there are multiple sellers, each one needs a separate clearance certificate. If even one person doesn’t have it, the ATO will withhold 15% of their share of the sale.
How to Avoid Delays and Sell Smoothly
- Apply early – Don’t wait until your property is under contract. If you think you might sell in the next year, get your clearance certificate now.
- Work with a solicitor or conveyancer – They can keep track of deadlines and make sure the certificate is ready before settlement.
- Keep copies handy – Once you have the certificate, store both a digital and printed copy so it’s easy to provide when needed.
- Speak to an accountant if unsure – If you’re worried about tax implications, it’s always good to check with a professional.
Final Thoughts
Selling a property is already a big process, and now there’s one more step to think about. But while the new ATO tax changes for property sellers in Australia might sound like a headache, it’s actually an easy fix—just apply for your clearance certificate well in advance, and you won’t have to worry about losing 15% of your sale proceeds.
If you’re planning to sell in 2025 or beyond, get ahead of the game and make sure you have your paperwork in place. That way, when settlement day comes, your money goes straight to you—where it belongs.
