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Selling an Investment Property? What You Need to Know About Settlement and Foreign Resident Capital Gains Withholding (FRCGW)
By Kellie Lethbridge
12 August 2025
If you’re selling an investment property in Australia, there’s more to consider than just finding a buyer and agreeing on a price. One key step in the settlement process is understanding the Foreign Resident Capital Gains Withholding (FRCGW) rules — which apply whether you’re an Australian resident or a foreign resident.
Why FRCGW Matters
The FRCGW regime was introduced to ensure that foreign residents meet their capital gains tax obligations. However, it also impacts Australian residents if certain requirements aren’t met before settlement.
Without the right documentation, a percentage of your sale proceeds will be withheld at settlement and paid to the Australian Taxation Office (ATO).
What You Need to Do
For Australian Residents
If you are an Australian resident selling a property valued at $750,000 or more, you must provide a clearance certificate from the ATO before settlement.
- Processing time: Up to 28 days — apply early!
- Without the certificate: The buyer is required to withhold 15% (previously 12.5% before 1 January 2025) of the sale price and send it to the ATO.
- Apply here: ATO Clearance Certificate Application
For Foreign Residents (Non-Residents)
If you are a foreign resident for tax purposes, you may be able to apply for a variation to reduce the withholding rate.
- Processing time: Up to 28 days
- Apply here: ATO Variation Application
Current Withholding Rates
On or before 31 December 2024: 12.5% for properties valued at $750,000 or more
On or after 1 January 2025: 15% for properties valued at $750,000 or more
Final Tip: Don’t Leave It Too Late
Whether you’re an Australian resident or not, the key to avoiding settlement delays and unnecessary withholding is to start the process early. Apply for your clearance certificate or variation well before settlement to keep your proceeds intact and your sale on track.
For more details, visit the ATO’s FRCGW Overview.
Need help?
FRCGW requirements can be tricky, and missing a step can cost you thousands. Qubed Advisory can guide you through the process, ensure you meet ATO requirements, and help you get the right documentation in place before settlement.
Contact us today to discuss your situation and avoid unnecessary delays or withholdings.
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