Important changes to foreign resident capital gains rules for sellers

If you’re a foreign resident and planning to sell a property, proposed changes to the Foreign Resident Capital Gains Withholding (FRCGW) rules could impact you. Starting 1 January 2025 (pending the Bill passing in Federal Parliament), the $750,000 FRCGW threshold will be removed, and the withholding rate will increase from 12.5% to 15%.

What this means for sellers:

• Removal of the $750,000 threshold would mean FRCGW applies to all property sales by foreign residents, regardless of the property's value. If the sale of a foreign-owned property is settled by 31 December 2024, it would be subject to the current threshold and rate of 12.5%.
• Australian residents and citizens are exempt but must apply for an exemption certificate from the ATO.
• Certificates are valid for 12 months and should be applied for early in the sales process to avoid delays at settlement.

REIWA is keeping a close watch on these changes and will continue to provide guidance to help you navigate the new requirements.