Foreign Resident Capital Gains Withholding (FRCGW) tax solutions

Protect your property investment from 15% Withholding Tax

Avoid FRCGW tax before settlement

Real estate agents

Help clients get variation certificates before settlement to reduce withholding to 0-5%.

Overseas investors

Selling Australian property? The government automatically takes 15% of your sale price. Apply for variation certificates before settlement.

Conveyancers

Ensure Compliant Settlements. Every foreign resident sale now requires 15% withholding. Verify FRCGW compliance on every international transaction to protect your practice.

Protect your property investment from 15% Foreign Resident Capital Gains Withholding tax

Are you a foreign investor selling Australian property?

Since January 1, 2025, the Australian government requires buyers to withhold 15% of your sale price for Foreign Resident Capital Gains Withholding (FRCGW) tax regardless of property value.

This means if you sell a property for $1 million, $150,000 goes directly to the Australian Taxation Office (ATO) at settlement.

Getting this money back can take months or even years.

We can help you avoid FRCGW tax before settlement

Before settlement, we can apply for a variation certificate and tax review to avoid paying the 15% withholding.

By submitting a FRCGW variation application before your property settles, we can reduce the withholding rate from 15% to match your actual tax liability often reducing it to 5%, 2%, or even 0%.

This means you keep your money at settlement instead of waiting months or years for a tax refund.

Foreign Resident Capital Gains Withholding tax

Protect your property investment from 15% withholding tax

Our FRCGW variation application process helps foreign investors legally minimise or eliminate withholding tax. We offer strategic tax minimisation plans customised to your unique circumstances.

At Palia Partners, we specialise in reducing or eliminating FRCGW tax for foreign property investors through:

Withholding rate variations and clearance certificates

We prepare and submit variation applications to reduce your withholding rate from 15% to as low as 0%, based on your actual tax liability. If you qualify, we also secure clearance certificates to completely avoid withholding.

Strategic tax planning for foreign investors

Calculate your real capital gains tax liability on Taxable Australian Real Property
Identify all available deductions and exemptions
Structure property sales to minimise withholding
Implement foreign investor tax minimisation strategies specific to your country

Tax recovery services

Already had tax withheld? We file early tax returns to recover your funds months faster than standard processing.

FRCGW tax questions

How do foreign residents avoid paying FRCGW tax in Australia legally?

Foreign residents can legally avoid or reduce FRCGW tax through the FRCGW variation application process. Before settlement, apply for a variation certificate showing your actual capital gains tax liability on Taxable Australian Real Property (TARP). If you're selling at a loss or have significant deductions, you can reduce the withholding rate from 15% to as low as 0%. The key is submitting your variation application early—ideally when listing your property—as ATO processing takes up to 28 days. Our foreign investor tax minimisation strategies ensure maximum legal deductions are claimed.

What is the difference between a clearance certificate and FRCGW variation certificate?

A clearance certificate is only available to Australian tax residents and completely eliminates the 15% withholding tax. Foreign residents cannot obtain clearance certificates. Instead, foreign residents must apply for a FRCGW variation certificate to reduce their withholding rate from the standard 15% to match their actual tax liability. While clearance certificates provide blanket exemption, variation applications require detailed calculations of your capital gains on Taxable Australian Real Property. Both documents must be provided before settlement/conveyancing to avoid withholding.

Can foreign investors reduce FRCGW tax on Australian property sales?

Yes, foreign investors and other foreign nationals can significantly reduce FRCGW tax using our foreign investor tax minimisation strategies. Foreign property owners selling Australian real estate must apply for an FRCGW variation before settlement. We help foreign investors navigate the complex variation application process, providing documentation in simple English and securing ATO approval in 14 days versus the standard 28 days processing time. Many foreign investors reduce their withholding from 15% to under 5%.

What happens if I don't get a clearance certificate before settlement?

Without a valid ATO clearance certificate or FRCGW variation notice before settlement, the buyer must withhold 15% of your total sale price and remit it to the Australian Taxation Office. Since the $750,000 threshold was removed in January 2025, this applies to all property sales. You'll need to wait until filing your next tax return to claim a refund—typically 12-18 months. This is why applying for clearance certificates or variations immediately when listing your property is critical for foreign residents and expatriates.

How long does the FRCGW variation application process take?

The standard FRCGW variation application process takes up to 28 days for ATO processing. However, our specialised service achieves 14-day average approvals through priority lodgement and complete documentation. Start your variation application before signing contracts to ensure approval before settlement. Emergency processing is available for properties already under contract, but success depends on settlement timeframes. The variation certificate, once approved, applies only to that specific property sale, unlike clearance certificates which last 12 months.

What is Taxable Australian Real Property (TARP) subject to FRCGW?

Taxable Australian Real Property (TARP) subject to Foreign Resident Capital Gains Withholding includes all residential properties, commercial real estate, vacant land, strata units, and agricultural land—regardless of value since the $750,000 threshold was removed. TARP also includes indirect property interests like shares in 'land rich' companies, mining rights, and leases over Australian land. Any foreign resident selling TARP must either provide an FRCGW variation certificate or face 15% withholding at settlement/conveyancing.

Can I apply for FRCGW variation if expecting a capital loss?

Yes, if your Taxable Australian Real Property sale will result in a capital loss, you should immediately apply for an FRCGW variation to reduce withholding from 15% to 0%. Provide evidence of your purchase price, improvement costs, and current sale price showing the loss. Many foreign investors don't realize they can avoid all withholding tax when selling at a loss. The variation application must prove your calculations to the ATO, which our foreign investor tax minimization strategies handle comprehensively.

How much can foreign investors save using FRCGW variation applications?

Foreign investors using our FRCGW variation application process typically save between $50,000-$300,000 per property sale. For example, selling a $2 million property normally triggers $300,000 withholding (15%). With proper variation applications showing actual tax liability of 5%, withholding reduces to $100,000—saving $200,000 at settlement. Since the $750,000 threshold removal, even small property sales benefit: a $500,000 sale saves $75,000 if you can reduce withholding to zero through variation.

What documents do I need for FRCGW clearance certificates and variations?

For ATO clearance certificates, Australian residents need their Tax File Number and proof of residency. For FRCGW variation applications, foreign residents need to provide several key documents. These include the original purchase contract showing the property's cost base and evidence of any capital improvements made. You also need to submit the selling contract, calculation of the expected capital gain or loss, and supporting documents for any deductions. In addition to these, you'll need to include specific residency documentation. Both clearance certificates and variations require lodgement before settlement—our service handles all documentation and ensures approval within 14 days versus standard 28 days processing.

Why choose Palia Partners?

Palia Partners Accountants Essendon North, Melbourne

Palia Partners is a dynamic chartered accounting firm in Melbourne focused on delivering exceptional value beyond traditional accounting.

We use modern practices and new technology to increase efficiency to support your success and growth.

Our passion lies in providing tailored, practical solutions that follow best business practices, offering you clarity and direction to achieve your goals.

We're innovative

We believe in using cloud accounting technology to ensure real-time financial data is available to you as and when you need it.

We're experienced

With a combined experience of 30 years, we are well equipped with diverse and specialised knowledge to work with you.

We're proactive

We don't sit back and let matters unfold. We keep you focused, and driven so you can meet your financial goals.