Taxation Administration (PAYG Withholding Variation for Foreign Resident Capital Gains Withholding Payments) Legislative Instrument 2026

The Taxation Administration (PAYG Withholding Variation for Foreign Resident Capital Gains Withholding Payments) Legislative Instrument 2026, registered as F2026L01231, was made on 16 September 2026 by the Deputy Commissioner of Taxation, Will Day, under subsection 14 235(5) in Schedule 1 to the Taxation Administration Act 1953. The instrument commences the day after registration on the Federal Register of Legislation.

The instrument varies the rate of foreign resident capital gains withholding that a purchaser must withhold in specified circumstances, including acquisitions from multiple vendors, acquisitions arising from a death, acquisitions from income tax exempt entities, acquisitions resulting from marriage or relationship breakdowns, and acquisitions resulting from mortgagee sales. It consolidates and repeals a number of earlier separate variation instruments covering these categories.

Foreign resident capital gains withholding applies to the sale price of Australian real property and certain other assets where the vendor is a foreign resident, and currently applies at a rate of 15 per cent to property contracts signed from 1 January 2025, unless the Commissioner has given a variation notice reducing the applicable rate. A purchaser who fails to withhold the correct amount can be liable for the shortfall, so the categories covered by the variation instrument are relevant to how purchasers calculate what must be withheld at settlement.

The instrument is a legislative instrument that varies existing withholding settings rather than a proposal, and it took effect from the day after registration.