Withholding Certificate

Withholding Certificate

New rules will apply to vendors disposing of certain taxable Australian property under contracts entered into from 1 July 2016. A 10% non-final withholding will be applied to these transactions at settlement.

Australian resident vendors selling real property will need to obtain a clearance certificate from the ATO prior to settlement, to ensure they don’t incur the 10% non-final withholding.

This new withholding legislation assists the collection of foreign residents’ Australian tax liabilities. It imposes an obligation on purchasers to withhold 10% of the purchase price and pay it to ATO, where a vendor enters into a contract on or after 1 July 2016 and disposes of certain asset types (or receives a lease premium for the grant of a lease over Australian real property).

The foreign resident vendor must apply for a tax file number (TFN) (if they don’t have one) and lodge a tax return at the end of the financial year declaring their Australian assessable income, including any capital gain from the disposal of the asset. The vendor may claim a credit for any withholding amount paid to us in their tax return.

  • Australian resident vendors can avoid the 10% withholding by providing one of the following to the purchaser prior to settlement
    • for Australian real property, a clearance certificate obtained from the ATO
    • for other asset types, a vendor declaration they are not a foreign resident.
  • Foreign resident vendors may apply for a variation of the withholding rate or make a declaration that a membership interest is not an indirect Australian real property interest and therefore not subject to withholding.
  • Purchasers must pay the amount withheld at settlement to the Commissioner of Taxation.


COVID-19 Announcement


Please be advised that our offices are open however due to social distancing regulations for the foreseeable future we will be limiting face to face conferences.

For clients regarding wills, power of attorneys and enduring guardianships we will organize to hold the meeting in a conference room that meets the social distancing rules.

We will be conducting our conferences via video conferencing or phone where necessary. At this point we will not be able to conduct any Notary Appointments.


Be assured that all property settlements will not be affected and will continue to be transacted electronically.  Russell Kelly & Associates is a certified accredited participant in Property Exchange Australia (PEXA).


We will be monitoring the governments responses and will update as necessary.