Do You Need a Clearance Certificate to Sell a House in WA?

Yes. If you are an Australian resident selling property in WA, you need a clearance certificate from the Australian Taxation Office, and the buyer must have it on or before settlement. Without one, the buyer has to hold back up to 15% of the sale price and pay it to the ATO. The certificate is free, so this is one of the cheapest problems in real estate to avoid and one of the most expensive to ignore.

Most sellers have never heard of it until their settlement agent asks for it. Here is what it is, what it costs you if you miss it, and when to get it done.

What a clearance certificate actually is

The rule behind it is called foreign resident capital gains withholding. The name makes it sound like it has nothing to do with you. It does.

The ATO wants tax collected from foreign residents who sell Australian property, so the buyer has to withhold part of the price unless the seller proves they are an Australian resident for tax purposes. The clearance certificate is that proof.

The rule tightened for contracts signed from 1 January 2025. Before then it applied at 12.5% to property valued at $750,000 or more, so plenty of Perth sellers never came across it. Now it is 15% and it applies to property of any value. A unit, a cottage or a family home on the river are all treated the same.

The ATO notes that a few specific circumstances do not need a certificate. Do not assume you are one of them. Ask your settlement agent.

What it costs you if you do not have one

The money is not lost, but it is out of your hands. The buyer pays it to the ATO at settlement, and you get it back as a credit through your tax return for that financial year.

Run the numbers on a $950,000 sale with one owner on the title. Fifteen per cent is $142,500. That is money you were counting on at settlement, and now you are waiting on your tax return to see it.

Joint owners are assessed separately. The ATO's own example is a couple selling for $600,000. One partner's certificate arrived in time. The other's did not. So 15% of the second partner's share, $45,000, was withheld, and that partner had to wait until their tax return was lodged and processed.

The real damage is what that does to your next move. If you are selling and buying at the same time, a six-figure hole on settlement day can put your purchase at risk. That is a very expensive result for skipping a free form.

Who has to apply

Every owner on the title, separately. The ATO does not accept joint applications, so a couple needs two certificates and three siblings who own a house together need three.

A few situations catch people out:

• Deceased estates. The executor applies using their own tax file number. If you are selling an estate home, put this on the list early.
• Trusts and super funds. The trustee applies using their own tax file number, and different residency tests apply to companies and trusts.
• Name changes. Certificates are issued in the legal name the ATO holds. REIWA has warned that delays happen when that does not match the Certificate of Title. Only first and last names need to match. If you have changed your name, update your details with the ATO before you apply, and have your marriage or change of name certificate ready for the buyer.
• People living overseas. Residency for tax is its own test, and it can change. If you have moved away, get tax advice before you list. Foreign residents do not use this form at all, and a different process applies.

When to apply

Earlier than you think. The ATO's advice is not to wait for a signed contract, and to apply as soon as you are thinking of selling.

REIWA says most certificates come through within a few days, but some take up to 28 days. The ATO quotes the same 28 days as its processing time. Settlement in Perth typically runs 8 to 12 weeks, which sounds like plenty of room until a buyer asks for a short settlement or your name does not match.

The certificate lasts 12 months from the date it is issued, so applying early costs you nothing. If you are preparing your home now and planning to list in the new year, do it now. It is one line off the list.

How to apply

• Go to the ATO's clearance certificate page at ato.gov.au/clearancecertificate and use the online form. It is free, and the ATO says online is the faster way to get it issued.
• Have your Certificate of Title handy so the names match exactly.
• Ask your settlement agent whether they will handle the application or want you to do it. Do not assume either way.
• Once it is issued, give it to your settlement agent and ask them to confirm it reaches the buyer's side on or before settlement.

One thing to keep straight: the certificate only deals with this withholding rule. It says nothing about whether you owe capital gains tax on the sale. That is a separate question for your accountant.

If you are working out the full cost of selling, I have put the rest in what it costs to sell a house in WA and settlement agent fees in WA.

Questions sellers ask

Do I need a clearance certificate if I am selling my own home and I live in Australia?
Generally yes. The ATO says all Australian residents for tax purposes selling Australian property must have one and give it to the buyer at or before settlement. It does not matter that it is your own home or that you have never lived overseas.

How much does a clearance certificate cost?
Nothing. Applying to the ATO is free.

How long does a clearance certificate take?
Most come through within a few days, according to REIWA, but it can take up to 28 days. Apply as soon as you are thinking of selling. The certificate is valid for 12 months.

What happens if I do not have it by settlement?
The buyer must withhold up to 15% of the sale price and pay it to the ATO. You claim it back as a credit through your tax return for that financial year, so you wait for your money.

Do both owners need one?
Yes. Each owner on the title applies separately. If one certificate is missing at settlement, 15% of that owner's share can be withheld.

The honest summary

It is a free form that protects up to 15% of your sale price. There is no good reason to leave it until the week before settlement. Every owner applies separately, the names need to match, and the certificate lasts 12 months, so do it as soon as selling is a real possibility.

If you are thinking about selling and want a straight answer on what your home would fetch and what you would walk away with, book a free appraisal, or grab the free seller's guide if you would rather read first.

This article is general information only and does not take your personal circumstances into account. It is not tax or legal advice. Details are from the Australian Taxation Office's guidance on clearance certificates (page updated 9 October 2026) and REIWA's guidance on name mismatches (March 2025). Rules can change, so check the ATO website and speak to your settlement agent or tax adviser before making any decision.