Capital Gains Clearance Obligations At Settlement

In July 2017 amendments were made to the ATO legislation requiring sellers of all property in Australia with a value of $750,000 or higher to provide a valid ATO Capital Gains Withholding Certificate prior to settlement.

This means if you are selling a property valued at $750,000 or higher you are required to comply with the legislation and provide the buyer/ buyers agent a valid ATO Capital Gains Withholding Certificate prior to settlement taking place.

Failure to provide a valid certificate will result in the buyers withholding 12.5 % of your sale proceeds under the Foreign Capital Gains Withholding (FRCGW) provisions at settlement and paying this amount to the ATO on your behalf.

Quite often we get the question “But I’m not a foreign buyer and I’m not subject to capital gains?” This does not matter as all sellers with properties valued at $750K or more must comply.

The process is very easy to do online and we can provide you with all the information you need to start.

We recommend you apply for your certificates when you list the property or as a minimum when the contract is signed. Currently ATO service guidelines state anywhere from 14-28 days to process a request and whilst the request is generally done quite quickly; as WA is experiencing a property boom currently the ATO is experiencing a backlog of processing and it can take anywhere up to 28 days to process this request.

So to avoid any last minute stress, get it done straight away and avoid the headache. Or if you require any assistance or have further queries call our friendly team on 9245 1500 for further advice.