If tax was withheld from a property sale under Foreign Resident Capital Gains Withholding (FRCGW), vendors — both Australian and foreign residents — may be able to claim it back when lodging their tax return for the year the contract was signed.
Australian residents often face withholding if they didn’t provide a vendor clearance certificate in time, while foreign residents are subject to withholding unless they obtained a variation notice. To claim the credit, taxpayers must lodge a return (even if under the usual income threshold) and declare all relevant income, then claim the withheld amount as a credit.
The withheld amount can be refunded in full if there are no tax debts, no CGT payable on the sale, and — for foreign residents — no tax payable on other Australian income. From 1 January 2025, the FRCGW rate increased to 15% on all property sales (previously 12.5% for property over $750,000).
Please contact us directly if you need any help with this.