Selling property in Australia

This guide provides a roadmap to selling property in Australia, covering legal requirements, market insights, step-by-step processes, cost breakdowns, tax implications, and smart financial management of sale proceeds. Plus, in case you need to repatriate funds after selling your Australian property, we’ll also cover international money transfer considerations, demonstrating how providers like Wise can compare with banks when transferring large sums internationally.

Key takeaways

• Before you can sell your property in Australia it’s important to understand the practical and legal framework used
• Getting professional help from a local real estate agent, as well as your solicitor and a tax professional can help the process go smoothly
• When selling a property in Australia you’ll usually have to pay for property surveys, advertising, staging and estate agent fees
• Capital Gains Tax (CGT) may also apply on any profit made if the property you’re selling is not your main residence, has been flipped, or has ever been used to generate an income
• Selling any property can take a significant time, depending on market conditions, the property type, and the time taken to manage the legal handover
• Once you’ve sold your property in Australia you must settle your financial obligations, and can then transfer your funds – if you’re sending your payment overseas, a provider like Wise can help you cut the overall costs of your transfer

Legal requirements for selling property in Australia

Selling a property can be a complex process – but before you even start it’s important that you understand all your local and cross border legal obligations. This guide covers key points – but it’s also good practice to get local advice from professionals who can address your specific situation and ensure you’re prepared properly to sell your property in Australia.

Some legal requirements it helps to know about:

• You are not legally required to have a solicitor to sell an Australian property, but managing the legal aspects without one can be difficult and risky
• Before marketing your property you may need to have a contract of sale already drawn up – this varies by state
• You will be asked to provide your identity and address at various points in the transaction, to comply with Australian law
• The seller is required to prepare a vendor’s statement which covers any known issues with the property. Issues which are classified as ‘material facts’ must be disclosed, and there are large fines for failing to disclose known problems
• Other documents needed when selling a property can depend on the state it is located in, but you may need your title deeds, zoning certificate, a drainage diagram, and an energy efficiency report

What are the documents needed to sell a property in Australia?

The full range of legal documents required for a property sale in Australia can vary a little depending on the type of property, and the location.

Your solicitor will manage most of the process, letting you know what paperwork you need to prepare – usually including:

• Your own photo ID and proof of address, and that of any co-owners
• A valid contract of sale – this is required prior to marketing a property in some states
• Property title deeds, zoning certificate, and a drainage diagram
• Vendors statement confirming any structural issues, planning problems and other possible facts that the buyer needs to know about
• In some states you must have an energy efficiency report
• If you expect to be exempt from CGT you must apply to the ATO to get a clearance certificate in advance of the property sale, to avoid having tax withheld when you settle

How to sell your house in Australia: Step-by-step guide

While every journey is a little different, the process to sell property in Australia will look quite similar in most cases. Here’s an outline of the usual steps involved with selling a property in Australia.

Step 1 – Get professional help and start the market analysis

Before you can put your Australian property on the market, you’ll need to get a valuation and prepare your local support team.

Although it’s not mandatory to use an agent, a licensed local real estate agent can help you assess your property’s market value. You may also want to consider whether undertaking any repairs or renovations would increase the property value. If this is something you consider, you’ll need to weigh the improvement costs against potential gains in asking price to decide if it’s worthwhile. Ultimately, a broad range of factors influence property value including location, property type, age, size, and condition – getting professional help to make a realistic price assessment can be a huge help.

At this early stage you can also start to pick out other professionals who may help you such as a solicitor to handle the legal aspects of the sale and prepare your legally compliant contract of sale.

Step 2 – Preparing documentation and advertising your property

Your next steps will be supported by your local advisors and must include preparing the legal paperwork and advertising your property.

Your agent or legal advisor may recommend professionals to complete the necessary additional checks and surveys, such as checking for termites or other issues which a potential buyer may be concerned about. They’ll also take a lead on preparing property descriptions and area information. Together you can create your preferred marketing strategy to help your property sell as quickly as possible.

If you’re an Australian resident selling a main home and therefore not required to pay capital gains tax, you’ll need to apply to the ATO for a clearance certificate at this stage. Your advisor can help you here. If you do not have a clearance certificate when you settle the sale, the purchaser must withhold the equivalent amount of CGT to remit to the ATO.

Step 3 – Managing viewings, receiving and evaluating offers

Once your property is advertised, it’s time to start conducting property viewings to find a buyer. Your agent can support this – particularly handy if you’re non-resident.

You can choose to sell your property either by private sale or auction in most cases. If you choose a private sale you can negotiate with the buyer to agree a sale price and conditions. In an auction you’ll need to fix a reserve price which you will not sell under, and a guide price to help buyers bid. The final price is then decided based on demand.

In a private sale, an offer can be unconditional, or conditional. At an auction all sales agreed are unconditional. Once a sale is agreed the buyer will usually pay a deposit of about 10% of the sale price to secure the property.

Step 4 – Contract exchange and legal completion

After agreeing a sale, the conveyancing process begins. There may be questions arising from the buyer – these will be handled by your solicitor, until you’re all agreed on the details of the transfer.

At this stage the buyer and their legal team complete any required due diligence checks and you can agree a settlement date together.

Step 5 – Settlement and fund transfer

The final step is called settlement – where the ownership passes to the buyer, on an agreed date. Usually this is around 30 – 90 days from the offer being accepted.

The property ownership passes over to the buyer once the outstanding purchase cost has been sent to the solicitor, and the sale is completed.

You’ll then receive the net sale proceeds by bank transfer. We’ll look at the likely tax obligations you’ll need to think about – and also how best to send your money to your home country once you’ve received it – in a moment.

Insider tip – Sending funds from a property sale overseas: Why Chris chose Wise

Wise offers high value, low cost payments if you need to send money abroad after selling a property in Australia. Your funds are converted with the mid-market rate and low, transparent fees – there’s even an automatic fee discount for higher value transfers. Here’s what one recent Wise customer has to say about the service on an online review website: “Brilliant service all the way from our house sale in Spain through to then transferring euros to GBP into a UK account. Would definitely recommend to everyone.” *In this example, the customer name was changed for privacy. The customer wasn’t paid to share their review.

Tax implications and responsibilities for property sellers

So – what tax do you pay if you sell a property in Australia?

Ultimately the tax implications of selling an Australian property vary depending on factors including whether it’s your primary residence, and the value of the sale.

There is also different tax treatment if you’re a resident versus non-resident of Australia.

Property sale taxes: Australian residents

As an Australian resident you may need to pay capital gains tax (CGT) if the property you sell is a second home or investment property, if you’ve used the property to make an income, such as running a business or renting it out, or if it’s on a lot of land. You may also have to pay tax if you ‘flip’ a property, renovating it with the specific intent to resell. If it is your main residence, you do not usually have to pay tax after the sale.

CGT is not reported as a separate filing to the ATO. Instead it is included in your normal filing using the Capital Gains Tax schedule.

If you are an Australian resident and do not need to pay CGT on your property, you’ll need to get an ATO clearance certificate early in the sale process. This is confirmation from the ATO that you don’t have to pay tax on the sale. Without the certificate the purchases must withhold 15% of the sale price and pay that to the ATO.

Property sale taxes: Non-residents

As a non-resident you’re likely to have to pay CGT on the sale of your Australian property, in the same way an Australian resident would for a second property or investment.

The rate of CGT is 15%, although this may be adjusted when you file your final tax return for the year. If 15% is more than you would have needed to pay based on any other income that is taxable in Australia during that year, you may receive a refund. If you’re confident you won’t be required to pay the 15% after the full tax year is taken into account you can also apply for a variation certificate from the ATO which may mean less is withheld from the property sale at the point of settlement.

The tax you pay on the sale of your Australian property depends on your circumstances, so you’ll need to get professional support or ask your solicitor to help you calculate what you owe.

As tax is complex – and even more complicated if you’re navigating an unfamiliar system – you’ll need to get professional advice to ensure you comply with all your legal obligations.

Income tax declaration requirements

You’ll need to include the sale of your property on your ATO filing for the tax year in which the property was sold, using the CGT schedule.

Is it necessary to declare a property sale on income tax as a non-resident in Australia?

Non-residents are required to pay CGT after the sale of an Australian property, which is usually withheld at the point of settlement. Get support from your legal advisor on this matter to make sure you’re clear on the process.

You may also need to take tax advice in your country of tax residence, as many countries tax worldwide income including foreign property sales.

International considerations for cross-border property sales

If you’re a foreigner selling an Australian property it’s important to know the regulatory requirements and your tax reporting obligations in both Australia and your own home country. Depending on your home country and where you’re a tax resident you may have obligations to the authorities in more than one location.

Once you’re confident that you’ve settled all your tax obligations you may want to move your funds from Australia to your home country. In this case, bear in mind that source of funds documentation is typically needed when transferring large amounts internationally. In this case, that may be proof of your property sale and a bank statement showing the money reaching your Australian bank for example.

It’s also crucial to find providers for cost-effective international transfers and currency exchange management. When you’re sending a high value payment, small percentage changes in the exchange rate used can mean a large fee to pay in the end. Finding a provider which uses the mid-market rate, or as close as possible to it, can often be the best way to ensure you’re getting a good deal on your transfer. Providers like Wise can help.

Bank vs. Wise: International transfers of large sums

To give you an idea of how this works, here’s a comparison of the price of a bank and Wise for sending money to an account in your own name based overseas. For this example we imagine we are sending 100,000 AUD to EUR to be received in a bank in Europe directly.

Sending 100,000 AUD to EUR	Sending money with Wise	Sending money with ANZ
Send money fees	289.94 AUD	0 AUD
Exchange rate	0.562132 – Mid-market rate	0.542457
Total received in EUR	56,050.22 EUR	54,245.66 EUR

In this example, you can see that you get more in EUR in the end with Wise. This is despite the fact that Wise’s transfer fees look to be higher compared to the fee used by ANZ.

The key difference here is that Wise uses the mid-market rate, while the bank adds a percentage fee to the rate used. This is a common practice, but it can mean you’re paying more in fees than you expect. On high value payments in particular, this cost can add up significantly until the conversion cost is far higher than the upfront fee you’re paying for the transfer.

Wise offers a solution for international property sellers, with international transfers that use mid-market rates and transparent fees, which include a discount for sending large amounts abroad. You can also use Wise rate lock features to protect against currency fluctuations, and if you’d prefer you can receive your payment in AUD to a Wise account to convert it at a later stage.

How much does it cost to sell a house in Australia? Cost breakdown

The costs of selling a property in Australia can go beyond CGT. Here are some common fees to consider:

• Real estate agent commissions: Australian real estate agents can have very variable fees ranging from 1.5% – 4.5% of the property value
• Advertising: Advertising may cost 0.5% – 1% of your property cost, and styling or staging fees may apply on top of this
• Legal and professional fees: You’ll usually need to have a solicitor to cover the legal aspects of the sale which may cost 1,000 AUD – 2,000 AUD for an average home
• Optional inspections: You may decide to complete several different surveys and checks depending on property type and location, such as termite reports which can cost 500 AUD – 700 AUD.
• Pre-sale preparation costs: Don’t forget to factor in any specific costs for things like repairs to your property before you put it on the market.

How long does it take to sell a house in Australia?

Australian authorities suggest it takes around 30 – 90 days on average to sell an Australian property.

In general, the timeline for selling a property in Australia can vary enormously based on factors like market conditions and seasonal variations, property type, location, and pricing, marketing effectiveness and presentation quality. Finding a buyer could take anything from a few days to a few months – generally properties in cities move quicker as they may be in more demand.

Tips and best practices for successful property sales

Here are a few final thoughts to make sure your property sale in Australia is a success:

• Get professional legal advice: Selling a property in another country is tricky – you’ll need local legal advisors on hand to help you avoid costly mistakes and ensure compliance with all legal requirements.
• Bear in mind currency conversion costs: If you need to repatriate the funds from your sale you’ll need to find a provider which offers low overall costs, including a good exchange rate. Tools like forward contracts or limit orders which are available from currency specialists can also help.
• Price your property carefully: Use recent sales data from your local area, and get a professional valuation to make sure you’re pricing your property appropriately.
• Have a diverse marketing strategy: Advertise your property on multiple channels and use work of mouth if possible to build interest.

Conclusion

While selling property in Australia can be complex, it’s achievable – and you can make the process far less stressful by engaging the right local support teams early on.

When selling a property in a foreign country you will need to take time to get to know local laws, market conditions, and financial obligations such as taxes on your property value. Bear in mind you may also have reporting or other duties in your home country.

Once you’ve successfully sold your property and it’s time to repatriate your funds, check out providers like Wise to make sure you get a great deal on your transfer. Wise uses the mid-market rate on currency conversion and has automatic discounts on fees when sending higher value amounts which may mean you spend less on fees and keep more for yourself in the end.

Frequently asked questions (FAQ)

What’s the best way to transfer my property sale proceeds internationally?

To transfer property sale proceeds internationally you’ll need to find a good value, secure service which offers low fees and a fair exchange rate. Providers like Wise which offer the mid-market rate on currency conversion and automatic discounts on fees for higher value amounts can be a good pick.

Do I need to pay tax on my property sale if I’m a non-resident?

You are likely to need to pay tax on a property sale as a non-resident, including capital gains tax. Tax can be complex, so getting professional advice is essential to make sure you comply with all your obligations.

Do I pay tax in the country I live in if I sell a property in Australia?

This can vary depending on your country of residence, your tax residence and your personal situation. Get professional advice if you are not sure of your tax obligations in Australia or in your home country.

What happens when I sell a property in Australia?

When you sell an Australian property you’ll need to settle any outstanding costs payable to your agent and mortgage provider, and your legal fees. You can then repatriate your funds if you choose to.

Is it necessary to use a real estate agent to sell my property?

It is not a legal requirement to use a real estate agent to sell a property in Australia – but doing so can mean you have a smoother sale experience, and get a higher price for the property in the end.

What to consider when selling a property in Australia?

Remember to check out the legal and practical requirements for selling a property in Australia, which may be different to your home country. You’ll need a good local team to advise you on legal and tax matters, the local real estate market and how best to proceed with your sale.

Useful Resources

• Australian taxation office – property sales; capital gains tax (CGT) tax overview
• Australian taxation office – selling and purchasing property; CGT withholding
• Australian taxation office – clearance certificates when selling a property
• Australian taxation office – residency and CGT
• Australian taxation office – main residence exemption rules
• Consumer Affairs Victoria – buying and selling properties
• Australian Competition and Consumer Commission – real estate consumer protection laws
• ANZ – costs of selling a property
• Wise – for currency exchange and international transfer services
• OFX – for currency exchange and international transfer services