Australian Sellers

Australian sellers must obtain a current FRCGW Clearance Certificate to avoid the 15% withholding. With the removal of the $750,000 threshold, all Australian residents involved in property sales must apply for this certificate. Given potential processing delays, frequent sellers might consider applying for a Clearance Certificate annually. These certificates are valid for 12 months and can be obtained before entering into a contract.

Foreign Sellers

The definition of a “foreign person” under the Duties Act 1997 in New South Wales is broader than just individuals. It includes individuals, companies, trusts, and partners in a limited partnership. A foreign person is generally someone who is not an Australian citizen or has not lived in Australia for at least 200 days in the 12 months prior to 31 December each year.

Foreign sellers should prepare for the increased withholding rate and the removal of the threshold. It remains possible to apply for a variation in the withholding rate under certain conditions.

These changes underscore the importance of understanding and complying with the updated FRCGW requirements to ensure smooth property transactions.

For further assistance or discuss how these changes may affect your situation, please contact our firm.