We’re reminding you of critical changes to ATO clearance certificate requirements that will impact all Australian residents selling real property from January 1, 2025.

As you know (and as we’ve discussed previously), clearance certificates are essential for property sales. However, recent updates to foreign resident capital gains withholding (FRCGW) legislation bring new urgency and specific requirements you need to be aware of.

Here’s a quick recap of what you need to know, with a focus on avoiding potential pitfalls

• Mandatory Clearance: From January 1, 2025, it’s not just a good idea – it’s mandatory. All Australian residents selling property must obtain a clearance certificate from the ATO.
• 15% Withholding Reminder: Without a valid certificate at settlement, the purchaser is legally required to withhold 15% of the sale price. This is a significant amount, and we want to help you avoid this.
• Name Matching is Crucial: Delays are frequently caused by discrepancies between the name on the Certificate of Title and the name registered with the ATO.

To prevent unnecessary delays and complications, remember these ATO tips

• Name Accuracy: Ensure your first and last names match ATO records exactly. Middle names are not required for matching purposes.
• Prioritize Name Changes: If you’ve changed your name, update your details with the ATO now. Australian-issued documents can be updated online, but overseas documents require postal submission, so don’t delay.
• Provide Proof: Be prepared to provide proof of any name change (e.g., marriage certificate, legal name change certificate) to the purchaser.
• Legal Name Only: Use your legal name on all documentation, not nicknames or anglicised versions.
• Apply Early – We Can’t Stress This Enough: While many certificates are processed quickly, some can take up to 28 days. Starting the application process early is essential.
• Refund Process: If 15% is withheld, it’s a longer process to get it back. You’ll need to lodge a tax return to receive a refund (if applicable).

Holdsworth Real Estate: Here to Help

We understand that these requirements can seem complex. That’s why Holdsworth Real Estate is here to guide you through the process.

• We strongly recommend that all clients planning to sell property after January 1, 2025, review their ATO details and begin the clearance certificate application process immediately.
• Our team can provide personalized advice and assistance to ensure a smooth and timely transaction.

For comprehensive details, please refer to the ATO website: ato.gov.au/clearancecertificate.

Don’t let these changes catch you off guard. Contact Holdsworth Real Estate today, and we’ll help you navigate the process with confidence.