Foreign residents selling an Australian home face 15% withholding

When a home in Australia, Canada or New Zealand is sold by an owner not resident there for tax, the state can take its share from the price before the proceeds leave. Australia’s buyer withholds 15% unless the tax office approves a lower rate.

Canada’s buyer is liable for 25% of the price unless the seller has paid 25% of the gain for a certificate. New Zealand withholds from offshore owners who sell within two years of acquiring.

Australia: 15% of the price, at any value

Foreign resident capital gains withholding applies to every sale of real property in Australia unless the purchaser receives, at or before settlement, a clearance certificate for a seller who is resident for tax purposes.

A foreign-resident seller cannot obtain a clearance certificate; the only relief is a variation notice specifying a reduced rate. Residence for tax, the Australian Taxation Office (ATO) notes, is tested differently from immigration status.

For contracts signed from 1 January 2025, a rate of 15% applies to the value of all property; from 1 July 2017 to 31 December 2024 it was 12.5%, and only on property valued at A$750,000 or more.

The base is usually the sale price, and the purchaser pays the amount to the ATO at or before settlement. In the ATO’s own example, a foreign resident’s apartment sold for A$1.2 million under a contract signed after 1 January 2025 means A$180,000 withheld unless a variation is in hand.

A resident avoids the deduction with a free clearance certificate, which can take up to 28 days.

A foreign resident faces the full rate unless a variation reaches the purchaser by settlement. A seller can apply where 15% is too high against their estimated Australian tax on the sale, for example where there is no capital gain.

An application can take up to 28 days, is lodged once the contract is signed, and requires all due tax returns to have been lodged, including those declaring rent where the home was let. Any excess comes back only through an Australian tax return for the income year in which the contract was signed.

Australia: no home exemption, a reduced or no discount

The withholding is a prepayment against the tax on the gain, and two reliefs open to residents are largely closed to foreign residents. The first is the main residence exemption.

A seller who is a foreign resident when the property is disposed of, which for a sale under contract means when the contract is signed, cannot claim it on a sale after 30 June 2020, not even in part for years lived in the home, unless the life events test is met.

That test requires foreign residence for a continuous period of six years or less and, within it, a terminal medical condition of the seller, their spouse or a child under 18, the death of the spouse or such a child, or a sale under a formal agreement after a relationship breakdown. A seller who meets it can also use the exemption as a ground to vary the withholding.

Foreign residents are also not entitled to the full 50% capital gains discount on assets acquired after 8 May 2012. An owner who was a foreign or temporary resident throughout gets none; one who was resident for part of the period can claim a discount apportioned to it.

A foreign person who applied to buy residential land on or after 7:30 pm on 9 May 2017 lodges a return each year while owning the home and may owe an annual vacancy fee for any vacancy year in which the dwelling is not occupied, rented or genuinely available on the rental market for 183 days or more, or if the return is late.

For vacancy years starting from 9 April 2024, the fee is double the foreign investment application fee. A foreign owner who sells must notify the Register of Foreign Ownership of Australian Assets.

Who can buy an established home in Australia

Since 1 April 2025, foreign persons, including temporary residents, have generally been barred from buying established dwellings. The Foreign Investment Review Board’s guidance of July 2026 gives 30 June 2029 as the end date and calls the ban “the Government’s policy”; no legislative instrument fixing that date was identified.

Australian citizens living abroad, permanent visa holders, such as holders of the National Innovation visa, and New Zealand citizens who hold or are eligible for a special category visa need no foreign investment application. These groups, together with Australian citizens at home, are therefore the main market for an established home that a foreign owner sells.

The purchase rules are covered in a separate article.

Canada: a certificate, or 25% of the price

Under section 116 of the Income Tax Act, a non-resident who disposes of taxable Canadian property must notify the Canada Revenue Agency (CRA) no later than 10 days after the disposition, or may do so in advance, on Form T2062.

The certificate of compliance issues once the seller pays 25% of the gain, meaning the proceeds less the adjusted cost base, or gives acceptable security; the CRA’s principal residence folio applies that prepayment to a non-resident’s home in Canada. Late notice costs C$25 a day, from a minimum of C$100 to a maximum of C$2,500.

Without a certificate covering the whole price, the purchaser is liable for 25% of the price, or of the part above the certificate limit, rather than of the gain; it must remit the amount within 30 days after the end of the month of purchase and may withhold it from the price.

The CRA puts the rate at 50% for certain types of property; the statute applies 50% to depreciable property that is taxable Canadian property and to real property that is not capital property.

This indicates that a rented building is depreciable property whether or not capital cost allowance was claimed on it, and so falls in the 50% class while the land under it stays at 25%; no CRA text read for this article says so in those words. The seller still files a Canadian return by 30 April of the following year, with the certificate attached.

Canada: years abroad count against the exemption

The principal residence exemption under section 40 of the Act counts only years in which the owner was resident in Canada, which bears on families who became residents, for example through the investor routes examined in a separate article, and later left.

For dispositions from 3 October 2016, the extra “one plus” year requires residence in the year of purchase. The CRA says this requirement typically prevents a non-resident from using the exemption to eliminate a gain.

This means a family that lived in its home and then left is taxed on the share of the gain the formula assigns to the years abroad. A signed letter attached to the T2062 can reduce the prepayment for the part of the gain the exemption covers.

The Underused Housing Tax, a 1% annual tax that applied mainly to foreign national owners, is not payable for 2025 and later years under a law that received Royal Assent on 26 March 2026.

The requirement to file and pay for 2022, 2023 and 2024 still applies, and a CRA page on Form T2062 says the CRA may refuse a certificate to an owner who has not met Underused Housing Tax filing and payment obligations. In British Columbia, the speculation and vacancy tax for foreign owners is 3% for 2026 and 4% from 1 January 2027.

The federal ban on purchases of homes by non-Canadians, in force since 1 January 2023, is repealed on its fourth anniversary under a 2024 budget law. This means that, counted from the date the ban came into force, the anniversary falls on 1 January 2027, the date the Department of Finance and the Canada Mortgage and Housing Corporation also give.

New Zealand: two years, then no withholding

Profit on a residential sale inside the bright-line period is taxable unless an exclusion or rollover relief applies.

For property sold on or after 1 July 2024, the period is two years, from the registration of the transfer to the seller, usually at settlement, to the date the seller enters into the sale agreement. A home lived in as the main home for more than half the period, over more than half its area, is excluded, and inherited property is outside the test.

Residential land withholding tax is deducted from an “offshore RLWT person” only when the sale falls inside the bright-line period. The term covers, among others, a non-citizen without a residence class visa, a citizen abroad continuously for three years or more, and a resident visa holder abroad for 12 months or more. The seller’s own conveyancer deducts the tax when the balance is paid at settlement.

The amount is the lowest of three calculations: 10% of the price; the gain over the original purchase price times 39% for individuals or 28% for companies, the rates on an Inland Revenue page last updated in 2021; and the price less any mortgage with a New Zealand registered bank or licensed non-bank deposit taker and unpaid local rates.

A seller of a home eligible for the main home exclusion can apply for a certificate of exemption before settlement, and any excess is refunded through a tax return.

Overseas people usually cannot buy a house or land in New Zealand; Australian and Singaporean citizens can. Since 6 March 2026, section 19E of the Overseas Investment Act has opened a consent pathway for holders of a “qualifying investor visa”, which Land Information New Zealand lists as the Active Investor Plus, Investor 1 and Investor 2 visas, to buy or build one home priced at more than NZ$5 million.

The same sale, seen from Vietnam

Vietnam’s Personal Income Tax Law 109/2025/QH15, as amended by Law 09/2026/QH16 (consolidated text 112/VBHN-VPQH), in force since 1 July 2026, taxes a resident individual on taxable income arising inside and outside Vietnam.

Income from transferring real estate, including housing, is taxable, and the tax on a resident’s transfer is 2% of the transfer price, not of the gain.

A person is resident with 183 days or more in Vietnam in a calendar year or in 12 consecutive months from first arrival, or with a regular place of residence there. How Vietnamese tax residence is decided is covered in a separate article.

The Law does not say whether the 2% reaches a home sold abroad. Read together, those provisions indicate that it would, and the exemption for an individual’s only home applies, in the Law’s words, to a single home “in Vietnam”.

Decree 253/2026/NĐ-CP allows personal income tax paid abroad to be deducted from the tax payable in Vietnam for countries with which Vietnam has signed a double taxation agreement, in accordance with that agreement. Whether such agreements cover Australia, Canada and New Zealand, and how they treat a home sale, was not checked.

What this article has not established

In Australia, the amending law behind the 2025 rate was not retrieved, so the rates rest on ATO guidance.

In Canada, four points were not examined: whether a tax treaty between Canada and Vietnam, if one applies, could exempt a home from section 116; the tax rate on a non-resident’s gain; processing times for certificates; and whether the CRA in practice still refuses certificates over 2022–2024 Underused Housing Tax. No extension of the purchase ban beyond 1 January 2027 was found, though not every source was searched.

In New Zealand, the 39% and 28% rates were not checked against the Income Tax Act, and the regulations defining qualifying investor visas were not read.

For Vietnam, beyond the tax agreements, it was not established whether the Decree 253 credit fits a tax computed at 2% of the price rather than on the gain, or how a sale abroad would be declared: the filing deadline found for real estate is tied to registering the change under Vietnamese land law.

The rules on bringing the proceeds into Vietnam were not examined; cross-border capital transfers are covered in a separate article. Sale withholding in the United States and elsewhere is covered separately.