Sell Australian property while you are a foreign resident and the buyer does not hand you the full price. They send 15% straight to the ATO. It is not an extra tax — it is a — but it is a large amount of your money held for months, and the rules changed twice recently.
The obligation sits on the buyer, not the seller. Under s 14-200 of Schedule 1 to the Taxation Administration Act 1953, a purchaser must pay the Commissioner 15% of the first element of the asset's — in a normal sale, 15% of the price — on or before the day they become the owner.
Two dates matter and people mix them up:
So becoming a resident between contract and settlement does not help. The question was already settled on the day you signed.
For contracts from 1 January 2025 the old $750,000 exclusion is gone and the rate is 15%. A $400,000 regional unit is caught exactly like a $4 million house. Guides still quoting "12.5% above $750,000" are describing law that no longer exists.
Section 14-215 still excludes some transactions, but they are structural rather than about size: sales on an approved stock exchange, transactions where tax is already withheld, and insolvency or bankruptcy situations.
A resident seller is not withheld against — but only if the buyer holds a before they pay the Commissioner. Apply under s 14-220; the certificate says there is nothing to suggest you are or will be a foreign resident.
The liability is the buyer's, and a buyer who has not been given a certificate in time must withhold — being obviously an Australian resident does not help you. You then wait until you lodge your return to get it back, which can be most of a year. Apply when you list the property, not when settlement is a week away.
Selling shares or units rather than land? Section 14-225 lets you declare instead — either that you are an Australian resident, or that the interests are not .
15% of the price can easily exceed the tax on the gain — and if you sell at a loss, there is no gain at all. Section 14-235 lets either party apply to the Commissioner for a variation, reducing the amount the buyer must pay. Do it before settlement; afterwards your only route is the refund in your return.
The Strengthening Accountability for Tax Adviser Misconduct and Other Measures Act 2026 widened what counts as for events from that date:
The rate and the absent threshold did not change. What changed is which deals fall inside the net.
The withheld amount is credited against your actual tax when you lodge. From 1 October 2026 the credit is recognised in the income year the withholding payment is recognised for income tax purposes (TAA 1953 s 18-15), which keeps the credit aligned with the year the gain is reported.
What else a foreign resident is taxed on →
Whether you were a foreign resident on the contract date is the whole question. Run the residency checker →
Yes, unless you obtain a variation under s 14-235. The withholding is calculated on the price, not on any gain, so a loss-making sale can have a large amount withheld and refunded later.
It does not help. Section 14-200 tests the position when the transaction is entered into — the contract date.
The withholding attaches to the foreign resident's share. The resident co-owner should still provide a clearance certificate so that their portion is not withheld against.
Straightforward cases are usually quick, but it is not instant, and a certificate that arrives after settlement is worthless. Apply when you list, not at the end.