Before selling any property over $750,000, Australian residents need to obtain an ATO Clearance Certificate (ACC). If you do not obtain an ACC then up to 12.5% of the settlement price will be paid to the ATO.
The purchaser of any property over $750,000 is required by law to pay 12.5% of the purchase price to the ATO unless a valid ACC is received during the settlement process. This is because current law deems that foreign residents that sell an Australian property are liable to pay 12.5% of the sale price as part of the Foreign resident capital gains withholding payments tax.
So, an ACC essentially is a statement from the ATO that the seller is not a foreign resident and that they can avoid this tax burden. By providing this to the buyer you are confirming that the buyer does not need to pay part of the purchase price to the ATO.
To avoid possible delays in settlement please make sure you acquire your certificate at least 14 days before settlement. The certificate is also valid for a period of one year and can be used for multiple disposals of a property.