New property withholding rules that take effect on July one will have an impact on mortgage lenders, a leading banking industry law firm has warned.Under the new rule, for purchases of property with a market value of A$2 million or more from a foreign resident seller, a ten per cent withholding charge will be incurred at settlement, with the withheld amount being credited against any capital gains or income tax payable by the seller on the sale.The new regime works on the assumption that all sellers are foreign residents until they can show otherwise.Australian residents selling a taxable Australian property with a market value of $2 million or more need to obtain a clearance certificate from the ATO, confirming that the withholding amount does not apply.If an Australian resident seller does not provide a clearance certificate to the buyer by settlement, the buyer will be required to withhold ten per cent and pay it to the ATO. There are penalties for failing to withhold.Gadens Lawyers said that a mortgagee expecting to receive 100 per cent of the sale proceeds could receive only 90 per cent if a purchaser decides to withhold.Gadens said in a note to clients last week that mortgagees may need to review their sale contracts, such as requiring that clearance certificates be provided.It said the withholding rule applied to all types of transactions, including company title. "Indirect foreign ownership of a vendor may trigger the obligation to withhold," it said.Gadens recommended that, when taking on a new mortgage, a lender should check whether or not the seller to the lender's customer was a foreign entity.