We know the lead-up to EOFY is a popular time for tidying up structures, shifting assets and getting things in order – especially when property is involved.

But this year, one tweak has gone unnoticed – and it’s been quietly holding up settlements: changes to ATO Clearance Certificates.

Since 1 January 2025, the ATO requires a clearance certificate for all property transactions, regardless of the sale price. If the seller doesn’t provide it before settlement, the buyer must withhold 15% of the property’s market value and pay it directly to the ATO.

 

what changed?

Prior to this year, ATO clearance certificates were only needed for sales over $750,000. That threshold is now gone.

From 1 January 2025 onwards, every property transaction in Australia requires a clearance certificate, including:

  • Transfers between trusts and companies;
  • Transactions involving SMSFs;
  • Family restructures and succession planning transfers; and
  • Residential or commercial sales of any value.

If the certificate isn’t provided by settlement, the buyer has a legal obligation to withhold 15% and pay it to the ATO. If they fail to do so, the buyer becomes liable for the full amount.

The rules apply equally to nearly all transactions, meaning related party transfers are not exempt.

 

don’t let it delay your settlement

Clearance certificates are issued by the ATO by applying through their website. They’re free to obtain but they can take up to 28 days to process.

The key? Don’t wait for your contract to be signed – sellers can [and should] apply early. Certificates are valid for 12 months, so it makes sense to get ahead of it if there’s even a chance a transfer will occur before 30 June.

 

key takeaways

  • All property transfers now require a clearance certificate, regardless of the sale price.
  • This includes related party transactions and internal restructures.
  • If no certificate is provided, the buyer must withhold 15% and pay it to the ATO.
  • The buyer is personally liable if they don’t comply.
  • Clearance certificates can take up to 28 days, so applying early is essential.

 

planning a transfer before 30 June?

If you’re looking to restructure, transfer property between entities, or are planning your next move, feel free to reach out to our team of legal experts at businessDEPOT on 1300 BDEPOT or oneplace@businessdepot.com.au.

 

Co-authored by Daniel Purcell.

 

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