Do you need a clearance certificate to sell a property?

Yes, if the contract was signed on or after 1 January 2025 and you want to be paid the whole price at settlement. Without an ATO clearance certificate, the buyer must hold back 15% of the price and pay it to the ATO, even when the seller is an Australian resident. That is for an ordinary sale at arm's length. You get the amount back as a credit in your tax return. This is the law as read on 16 October 2026.

What is the rule?

For a contract signed from 1 January 2025, the buyer of Australian real property must hold back 15% of the price and pay it to the ATO by settlement. The buyer does not have to if the seller gives them a clearance certificate by then, or an exclusion applies. An ATO variation can lower the rate, and only a nil variation removes the holdback. The rule is in Schedule 1 to the Taxation Administration Act 1953 (ss 14-200 and 14-215), and the ATO explains it in its withholding overview.

Does it depend on the price?

Not any more. Property under $750,000 is no longer left out. From 1 July 2017 to 31 December 2024 the rate was 12.5%, and only for property worth $750,000 or more.

Does it apply to Australian residents?

Yes. For a contract signed from 1 January 2025, it covers Australian residents too. An Australian resident avoids the holdback by giving the buyer a certificate. The ATO's page for Australian residents and clearance certificates says how to get one.

What does it look like on a sale?

The ATO's example has two owners. Willow and Stanley sign a contract on 8 January 2025 to sell their home for $600,000. Willow gives the buyer a clearance certificate and Stanley does not. The buyer holds back $45,000, which is 15% of Stanley's share of the proceeds.

How do I get the money back?

The seller claims the amount held back as a credit in the tax return for the year the contract was signed. It comes off the seller's tax for that year, and the ATO refunds what is left, if there are no tax debts. So that cash comes back only after the return is assessed.

What should I keep?

• The contract date, which decides the rule and the tax year.
• The clearance certificate, or the buyer's notice of the amount held back.
• The settlement statement that shows what was paid to the ATO.

On PropRetire the capital gains tax calculator shows the cash a sale leaves after the loan, the costs and the tax, and how much cash is left after selling a rental follows each line.