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The email came from a frustrated and unhappy reader, and he didn’t mince words.

‘Why does the current government require Capital Gains Tax Clearance Certificates from every property seller in Australia? I understand the need to identify foreign property owners for CGT, but why apply it to everyday Australians who own and live in just one property? Surely, there must be a better way to identify foreign investors.’

‘I am 68 and live on acreage—I don’t want to downsize because my one-acre block brings me joy through flower and vegetable gardening in my retirement. My issue is that many people might miss this requirement and risk losing a significant percentage of their home’s sale price. What can be done to prevent this?’ they continued.


It was news to me, but given how important this could be, I’ve done the research. Mark Molesworth, tax partner at BDO, tells me the tax law on withholding tax for Australian real estate sales changed from 1 January 2025. From that date, all sellers must obtain a residency clearance certificate—if they are an Australian resident—or risk having the buyer withhold 15% of the market value of the property. These rules have been gradually extended by governments of all sides since they were first introduced in 2016.



For contracts signed before 1 January 2025, the new legislation doesn’t apply, even if settlement happens in 2025. For those pre-existing contracts a clearance certificate is only required if the market value of the property exceeds $750,000. However, for all contracts signed on or after that date, a clearance certificate will be mandatory regardless of the property value.



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