Written by Mel Dennis
Read time: 2-3 minutes
If you’re an overseas resident who’s sold property in Australia recently, you might have been surprised to see 15% of the sale price withheld at settlement.
Don’t worry—you haven’t been scammed. This is a legitimate Australian tax rule known as the Foreign Resident Capital Gains Withholding (FRCGW).
And yes, you can get that money back.
What Is the 15% Withholding Tax?
The FRCGW withholding tax applies when a foreign resident sells an Australian property worth $750,000 or more. In this case, 15% of the sale price is withheld by the buyer and sent directly to the Australian Taxation Office (ATO).
It’s not an extra tax—it’s more like a prepayment of any capital gains tax you may owe. If you don’t owe any, you can claim it back.
How Do You Get It Back?
To recover your 15% withholding, you’ll need to:
- Lodge an Australian Tax Return
After the financial year in which the property settled, you’ll need to lodge a tax return with the ATO. That’s when you’ll:
- Declare the property sale
- Claim a credit for the 15% that was withheld
Example: If you settled in November 2024, you can lodge your return from 1 July 2025 (for the 2024–25 tax year).
- Include Proof of the Withholding
To support your claim, include:
- A copy of the sale contract and settlement statement
- Confirmation that the 15% was withheld and paid to the ATO (usually provided by the buyer’s solicitor or conveyancer)
- Receive Your Refund
Once the ATO processes your return:
- If you don’t owe tax, you’ll get the full 15% refunded
- If you owe less than 15%, the balance is refunded
Can You Avoid It Upfront?
If you expect to owe little or no tax, you can apply for a withholding variation certificate before settlement. If approved, the buyer may withhold less (or nothing at all).
Apply here: ATO Variation Application
The Bottom Line
If you’re an overseas seller of Australian property, the 15% withholding is a normal part of the process—but it’s not necessarily money lost. With the right paperwork and a tax return, you can claim it back.
Need help or a referral to a tax agent who knows the ropes? We can connect you with someone who speaks the ATO’s language.
Get in touch today.
Useful Links
- ATO: Foreign Resident Capital Gains Withholding (FRCGW)
Learn more about the 15% withholding rules and how they apply to foreign sellers.
- ATO: Apply for a Variation (To Reduce or Remove Withholding)
If you think less tax should be withheld, you can apply for a variation before settlement.
- ATO: Lodge an Australian Tax Return (as a non-resident)
Instructions for overseas residents on how to lodge a return and claim credits or refunds.
👉 https://www.ato.gov.au/Individuals/Lodging-your-tax-return/
- Find a Registered Australian Tax Agent
Search the official register to find qualified professionals who can help with your return.
