Short answer
Yes. On 1 January 2025, the FRCGW threshold dropped from $750,000 to $0. Every Australian property sale is now in scope, regardless of sale price. A $300,000 apartment sale triggers the 15% withholding rule unless the seller produces an ATO clearance certificate. This is a fundamental rule change that affects every seller. On a $300,000 sale, $45,000 is withheld. On a $900,000 sale, $135,000 is withheld.
The rule explained
Before 1 January 2025, the Foreign Resident Capital Gains Withholding (FRCGW) rule only applied to property sales above $750,000. Property sales under $750,000 were exempt. From 1 January 2025, the threshold dropped to $0. This means every property sale — from a $300,000 apartment to a $5 million farm — is now subject to the 15% withholding rule. The ATO withholds 15% at settlement unless the seller produces an ATO clearance certificate. This is a fundamental shift in the law. The rule is set out in TAA 1953 Schedule 1 Subdivision 14-D, enacted by the Treasury Laws Amendment (Foreign Resident Capital Gains Withholding) Act 2024, Royal Assent 21 November 2024, effective 1 January 2025.
At the same time the threshold dropped, the withholding rate increased from 12.5% to 15%. This is a 20% jump in the withholding amount. On a $900,000 sale, the old rule (pre-1 Jan) would have withheld $112,500 at 12.5%. The new rule withholds $135,000 at 15%. The difference is $22,500 more cash locked up. Combined with the threshold drop to $0, the new rule affects far more sellers and withholds more money from each sale.
What most people get wrong
Many accountants trained before 1 January 2025 still tell clients that FRCGW only applies to sales over $750,000. Wrong. The rule changed. Every property sale applies. Many sellers selling a first-home apartment for $400,000 assume they fall below the threshold and do not need to apply for a certificate. Wrong. At $400,000, the withholding is $60,000. If no certificate is provided, the buyer withholds $60,000 at settlement and the seller receives $340,000 on the day. The $60,000 is locked up pending tax refund (6–18 months). AI tools trained on pre-1 January data still quote the old $750,000 threshold and 12.5% rate. Trust the legislation: TAA 1953 Subdivision 14-D, effective 1 January 2025. Threshold $0. Rate 15%.
Worked example
Property sale price $400,000 (first apartment), Australian resident, settlement 30 May 2025. Under the old rule (pre-1 Jan 2025), FRCGW would not apply because the sale is under $750,000. Under the new rule (from 1 Jan 2025), FRCGW applies. Withholding: $400,000 × 15% = $60,000. Without the clearance certificate, the buyer withholds $60,000 at settlement. The seller receives $340,000 on settlement day. The $60,000 sits with the buyer pending ATO refund (6–18 months). This is a material cash position on a $400,000 sale. Many first-time sellers do not see it coming because they remember the old $750,000 threshold.
Run your check
The free FRCGW clearance certificate calculator applies the current rule (threshold $0, rate 15%) to your sale price and shows you the exact withholding exposure. Takes 90 seconds.