Digital Nomad
What Digital Nomads Need to Know About Australia’s 15% Foreign Withholding Rule From January 1, 2025
Australia’s Foreign Resident Capital Gains Withholding regime has been significantly updated. Digital nomads disposing of Australian property should understand the new 15% withholding rate and how clearance certificates can spare them from withholding.
By NomadicTax Research Team • 5-8 min read • November 23, 2025
## Overview
From 1 January 2025, Australia’s foreign resident capital gains withholding (FRCGW) rate on taxable real property contracts signed by non-residents (or foreign vendors) rose to **15%**, and the **$750,000 threshold** that used to exempt some transactions has been removed. The change now applies to all contracts without a clearance certificate provided by an Australian resident vendor. ([ato.gov.au](https://www.ato.gov.au/individuals-and-families/your-tax-return/before-you-prepare-your-tax-return/what-s-new-for-individuals?utm_source=openai))
## What Digital Nomads Should Be Aware Of
- If you own property in Australia—whether it’s vacant land, commercial or residential property—you may be impacted when you **dispose** of it. That includes indirect Australian property (e.g. shares or units in certain trusts or companies) if they represent Australian real property. ([ato.gov.au](https://www.ato.gov.au/businesses-and-organisations/international-tax-for-business/in-detail/multinationals/global-and-domestic-minimum-tax?utm_source=openai))
- As a non-resident vendor, you should ensure that:
- you budget for the 15% withholding which may be held back by the purchaser; and
- you investigate whether a clearance certificate is possible (if you are an Australian resident vendor), which can prevent withholding. ([ato.gov.au](https://www.ato.gov.au/individuals-and-families/your-tax-return/before-you-prepare-your-tax-return/what-s-new-for-individuals?utm_source=openai))
## Practical Example
Suppose you're a U.S. citizen living nomadically, and you own an Australian residential property that you entered into contract to sell on 15 January 2025. Under the old rules you might have been exempt if your sale was under the $750,000 threshold—and had other conditions met. Now:
- The sale is subject to 15% withholding from the contract price unless you provide a **clearance certificate**.
- There’s no threshold limit anymore.
- Even if you're not in Australia, the ATO requires disclosure and compliance under these rules. ([ato.gov.au](https://www.ato.gov.au/about-ato/consultation/in-detail/matters/2024-completed-matters?utm_source=openai))
## Actionable Steps
1. **Check if you're a non-resident** under Australian tax law. If so, know these withholding obligations apply.
2. **Obtain a clearance certificate ahead of contract settlement**, if eligible, to avoid withholding.
3. **Keep detailed records** of all sale documents, valuations, and communications.
4. **Seek Australian tax advice**, especially if you deal with indirect Australian property, trusts, or foreign investment in real estate.
## Why This Matters
For nomads, these withholding obligations can pose cashflow challenges if you are not anticipating a large block of funds being withheld at the time of sale. Proper planning ensures you retain maximum proceeds, avoid penalties, and comply with Australian law with minimal friction.
**Bottom line**: If you’re disposing of Australian real property contracts signed on or after **1 January 2025**, plan for **15% withholding** unless you get a clearance certificate. Early action saves cost and hassle.