Important Update for WA Property Sellers: ATO Clearance Certificates Required in 2025

From 1 January 2025, all sellers with contracts of sale dated on or after this date will need to provide an ATO Clearance Certificate to avoid 15% of the sale price being withheld and paid to the ATO at settlement 😮

Here’s the good news:

The process is super straightforward! Head to the ATO’s website and fill out a few basic details. Once processed most Clearance Certificates are issued within a few days, some can take up to 28 days, so it’s important to apply early to avoid delays. Your Clearance Certificate will be emailed to you, ready to share with your conveyancer. If you’re an Australian resident for tax purposes, this certificate ensures you’ll receive the full sale proceeds at settlement 🙌

For more information, visit the ATO website.

Why This Matters:

These changes might catch some sellers off guard since there hasn’t been a lot of public discussion about them. We’re encouraging all our real estate agents to help spread the word early! By applying for the certificate ahead of time, sellers can avoid unnecessary delays and ensure a smooth settlement process 🤝

A Few Quick Facts:

• Who needs it? Every seller, for contracts dated 1 January 2025 or later.
• Why apply? To confirm your residency status and avoid 15% of the sale price being withheld.
• How long is it valid? Clearance Certificates are valid for 12 months. If you’re selling multiple properties within that timeframe, one certificate may cover them all.
• Where to apply? Apply online through the ATO website. Apply for ATO Certificate. Please ensure you always use your full legal name to avoid any potential delays. If you have any questions, please call your conveyancer.
• What if I need to update my name before I apply? If your legal name has changed, you’ll need to update your details with the ATO before applying for a Clearance Certificate. This can be done by updating your Tax File Number (TFN) registration details online through your myGov account linked to the ATO. For more information, visit the ATO’s guide: Update your name with the ATO.
• When and how will I receive my certificate? Once your application is processed, the ATO will email your Clearance Certificate to the address provided in your application. If you don’t receive it via email, you can access it through your myGov account:
  1. Log in to myGov.
  2. Navigate to ATO Online Services.
  3. Select My profile from the menu.
  4. Choose Communication, then History.

Here, you can view and download your Clearance Certificate. If you encounter an issues, contact the ATO for assistance.

• What happens if I don’t receive my certificate before settlement? If you don’t have your Clearance Certificate by settlement, the purchaser is legally required to withhold 15% of the sale price and remit it to the ATO.  You will only receive any refund due after your next income tax return is processed at tax time. This will delay access to your full sale proceeds.

Got questions?

We’re here to help! If you’d like to discuss how these changes might impact your next property sale, don’t hesitate to reach out. Early action can make all the difference 👍

For further assistance, you can also contact the ATO directly by calling 13 28 66 (Fast Key Code 4, 2).