Do I Need an ATO Clearance Certificate to Sell My Property?
Yes, from 1 January 2025, you need an ATO Clearance Certificate to sell your property, even if you’re an Australian resident. This certificate proves to the buyer that you’re not a foreign resident for tax purposes.
If you don’t provide one, the buyer is legally required to withhold 12.5% of the sale price and send it to the ATO. That could mean losing access to a large portion of your funds until the matter is sorted out—something best avoided with a bit of forward planning.
Understanding the ATO Clearance Certificate
An ATO Clearance Certificate is an official document issued by the Australian Taxation Office (ATO). The certificate validates that the seller of a property is an Australian resident and thus exempt from the Foreign Resident Capital Gains Withholding (FRCGW) tax.
A Brief Overview of Foreign Resident Capital Gains Withholding
Effective 1 January 2025, property buyers are required to withhold 15% of the purchase price under the FRCGW tax for transactions involving foreign resident sellers. The withheld amount is then remitted to the ATO, ensuring foreign residents fulfil their tax obligations in Australia. This measure also plays a role in addressing housing affordability.
Who Does the Foreign Resident Capital Gains Tax Affect?
The FRCGW tax impacts every property, regardless of the owners’ nationality. It influences Australian resident property sellers, foreign resident property sellers, and property buyers.
Impact on Australian Resident Property Sellers
As an Australian resident selling property, you can avoid the FRCGW tax by providing an ATO Clearance Certificate to the buyer before the property settlement. However, if the certificate is not produced by the settlement date, you are treated as a foreign resident, and the buyer is obligated to withhold the FRCGW tax.
Impact on Foreign Resident Property Sellers
As a foreign resident seller, the buyer withholds 15% of the purchase price, which is transferred to the ATO as an FRCGW tax. Although foreign residents cannot apply for ATO clearance certificates, they can apply for a tax rate variation depending on their circumstances.
Impact on Property Buyers
As a property buyer, if the seller fails to produce an ATO clearance certificate by the settlement date, you must consider the seller as a foreign resident and withhold 15% of the purchase price. This withheld amount is then paid to the ATO as an FRCGW tax.
Obtaining an ATO Clearance Certificate
The application process for an ATO clearance certificate is straightforward and can be initiated online through the ATO’s official website. It can also be completed and lodged on your behalf by a third party like your conveyancer, tax agent, or legal practitioner. However, it’s important to note that the application for an ATO clearance certificate should be submitted as early as possible to avoid any settlement delays.
Timing Your Application for an ATO Clearance Certificate
While the ATO clearance certificate can be obtained quickly via an online application, not all applications are processed automatically. Approximately half of the applications are manually processed, which can take between 14 and 28 days. Therefore, applying as soon as possible is crucial to avoid potential delays in your property settlement. Clearance certificates are valid for 12 months from the date of issue.
Leveraging the Expertise of a Good Gold Coast Real Estate Agent
As great Gold Coast Real Estate Agents, we are well-versed in the nuances of the Australian property market. When it comes to the ATO Clearance Certificate, it is best to seek advice as soon as possible from a third party like your conveyancer, tax agent, or legal practitioner, so as to ensure a smooth property transaction.
If you’re planning a property transaction on the Gold Coast, reach out to us for professional, informative, and stress-free advice; we are here to get you from thinking about it, to selling, to you are SOLD.
Remember, when it comes to navigating the complex world of selling real estate, it’s always wise to have a good Gold Coast Real Estate Agent by your side.
THIS IS HOW YOUR JOURNEY TO A SUCCESSFUL GOLD COAST PROPERTY SALE STARTS
My simplified guide below will take you through a 20-step process for selling your property anywhere on the Gold Coast;
I proudly sell homes across the entire coast.
1. PREPARING YOUR GOLD COAST PROPERTY FOR SALE + SOME OF THE LEGAL REQUIREMENTS
- Tidying gardens and decluttering everything inside and out.
- All homes for sale, are legally required to have hardwired photoelectric, interconnected smoke alarms.
Non-removable 10-year battery smoke alarms can be installed as an alternative.
- By law, you are required to complete a pre-contractual seller’s disclosure statement: generally related to limitations, restraints, or defects in the property title, such as easements, covenants, leasing, zoning, etc.
- A pool safety certificate is also required if you have a swimming pool or if the property has a shared swimming pool (Body Corporate).
2. COMPARATIVE MARKET ANALYSIS REPORT FOR YOUR GOLD COAST PROPERTY
After showing me around your property, I will provide you with a Comparative Market Analysis (CMA) report. This is a detailed, legally required analysis of your home’s market value.
The CMA is based on recently sold and for-sale properties similar to yours in the immediate area. I will need to view your home to prepare this report.
3. SETTING A MARKETING BUDGET FOR YOUR GOLD COAST HOME
The third step in selling your home is to create a marketing budget.
By law, this must be based on actual costs.
There are various marketing options to consider, such as:
– Internal, External and Drone Photography.
– Property and House Plans show potential buyers the exact layout of your home and property.
– Internet Advertising on platforms such as RealEstate.com.au, Domain.com.au, Facebook.com, Instagram.com, etc.
– For Sale Sign on the street is still essential to attracting potential buyers. Even though many buyers start their search online, they often drive around neighbourhoods to see what’s available.
A simple fact: Not having a For Sale sign can significantly reduce the number of people who see your property and may be interested in buying it.
4. PREPARING AND APPROVING THE FORM 6 AGREEMENT WHEN SELLING A GOLD COAST PROPERTY
A Form 6 Agreement is a document provided by the Queensland State Government. It outlines all relevant details of the property sale, including the marketing budget.
Our administration team will prepare this form for you and send it for your review and approval.
5. PAYING THE MARKETING BUDGET FOR YOUR GOLD COAST PROPERTY
Once you have approved the Form 6 Agreement, the next step is to pay for the marketing budget that you have chosen.
6. STARTING THE ADVERTISING PROCESS
Once your payment is received, the advertising campaign will commence.
Advertising strategies will align with the choices you made within your marketing budget.
7. MONITORING MARKET RESPONSE
If your property hasn’t received offers within 30 days, don’t assume there’s no interest.
It often means the price isn’t aligned with what buyers are willing to pay at this time.
This is your signal to review and adjust your pricing strategy so your home remains competitive and receives the attention it deserves.
8. ARRANGING BUYER VIEWINGS
When buyers express interest in your property, viewings will be arranged to allow them to see your home in person; you need to be away from the property during these viewings.
This helps potential buyers feel relaxed and visualise themselves as the new owners, thereby forming a deeper connection with your property.
9. CONSIDERING A BUYER’S OFFER
When you receive an offer on your home, it means a buyer is serious and ready to move forward at a certain price.
This is a key moment in your selling journey. Take the time to go over the offer carefully.
Look beyond the price; check the terms, conditions, and settlement timeframes. Make sure it works for you before accepting, countering, or declining.
10. ACCEPT, COUNTER, REJECT
When an offer is presented, you will need to respond by accepting, countering, or rejecting it.
Accepting locks in the agreed-upon price and terms.
Countering proposes changes and initiates further negotiations. If countering, present revised terms clearly; open, respectful communication is key for a smooth sale.
Rejecting means the offer is unacceptable; in this case, respond promptly and professionally, explaining your reasoning for the decision.
11. YOUR LEGALITIES
When you finally accept an offer, you will engage your conveyancer or solicitor to facilitate the legal requirements to complete the sale.
If you are part of a Body Corporate, you will need to provide a Disclosure Statement from them.
Your solicitor will use PEXA to settle your property. Part of the process requires Verification of Identity. Also, anyone selling a property must complete an ATO Clearance Certificate.
12. BUYER’S DEPOSIT
The buyer’s deposit is a crucial step in the property purchase process; it will be held in the agency’s Trust account.
This is a tangible expression of the buyer’s commitment to purchase your property.
13. BUILDING AND PEST INSPECTIONS
Typically, a buyer will arrange for a building and pest inspection report to be completed, usually within 14 days of the contract date.
Additionally, they may have the contract subject to finance, which is generally applicable for 21 days from the contract date.
14. COMPLETING YOUR GOLD COAST PROPERTY SALE
Based on the outcome of the building and pest inspection report, as well as any finance being sought, the buyer will proceed with their offer or withdraw it.
At this point, the sale either falls through or becomes unconditional.
15. LOOKING FOR YOUR NEW PROPERTY
If the sale becomes unconditional, it is time to start looking for a new property. Remember, there is no need to rush.
It is essential that you take your time, as this needs to be a very considered purchase.
Your new home is of substantial value and can be costly if you change your mind. Something you may want to investigate is Short-Term Bridging Loans.
16. ALTERNATIVES YOU SHOULD CONSIDER
An alternative to seriously consider when deciding where to live between selling and buying is renting while you look for a new property.
Renting for a short period gives you breathing room; it allows you time to clear your head, make a confident, considered decision, and ultimately buy where you truly want to live, with no pressure or panic.
17. TIME FOR YOU TO MOVE
Leaving your home opens doors to a new chapter full of new beginnings. Embrace the excitement of a fresh start and cherish the memories you’ve made.
Every box you pack brings you one step closer to a new adventure full of possibilities that lie ahead.
18. YOUR SALE CONCLUDES
The culmination of the property sale is settlement; it marks the transfer of the property to the new buyer.
As the final chapter concludes, this marks a sense of achievement: your property has now SOLD.
19. YOUR FUTURE OPTIONS
If you have chosen to rent, you will continue to look for and eventually purchase a property, apartment, or perhaps even buy land and build; now there’s something to consider.
20. TIME TO UNWIND AND MAKE YOUR NEW HOME YOUR OWN
As you unpack and furnish your new home, embrace the gradual process of creating your haven.
Enjoy the transformation, one room at a time.
Relax in the tranquillity of your surroundings and immerse yourself in the gentle sounds of your new neighbourhood.
Explore the nearby parks and cafes; enjoy the unique charm of your new community.
Remember, settling in is a journey in itself; it’s not a race. Embrace the process of creating a home that reflects your unique style and personality.
Whether you’re downsizing, relocating or just ready to move on, I’ll guide you through every step of selling your Gold Coast home with confidence and ease.
Navigating the intricacies of selling your property can be complex, but it doesn’t have to be.
My 20-step guide provides a simplified general overview; as you would naturally expect, your steps may vary.
Author – Craig Douglas
Are you ready for a conversation about selling your Gold Coast home?
Let’s get you Selling
LET’S GET YOU SOLD
Craig Douglas 0418 189 963
Professional | Knowledgeable | Experienced
You can find me working at a Boutique Real Estate Agency
These are just some of the suburbs that I proudly sell homes in:
Emerald Lakes
Please Note: The information contained in this document is for general information purposes only and does not constitute legal advice. The laws and regulations governing the sale of property in Queensland are complex and constantly changing. It is important to seek the advice of a qualified property lawyer or conveyancer before making any decisions about the sale of your property. This document does not take into account your individual circumstances and may not apply to your situation. By reading this document you agree that you have not relied on the information contained herein and that you will seek independent legal advice before taking any action.
This page was proudly created by Craig Douglas, your local independent Gold Coast real estate agent, working for a Boutique Real Estate Agency. Selling residential and commercial properties, from those that are awe-inspiring, through to a diamond-in-the-rough, otherwise known as a “renovator’s delight“.
I negotiate and sell on behalf of property owners who want to get the best possible price with the least amount of hassle. Let’s talk about the process of selling your property over a coffee to get you started – 0418 189 963
