As previously reported here, the Government recently resurrected measures to deny the capital gains tax (CGT) main residence exemption to foreign tax residents. Despite significant submissions from tax professionals, the Senate passed the Bill yesterday and the Bill now awaits Royal Assent.

Following Assent, the new law means that, with limited qualifications, individuals who are foreign tax residents at the time of selling their Australian main residence will be liable for CGT on the increase in value since acquisition (the individuals may be eligible for a partial application of the 50% CGT discount). This is despite the possibility the person may have owned the property as an Australian tax resident since as early as September 1985 before moving overseas.

Foreign residents who currently treat an Australian property as their main residence for CGT purposes may wish to carefully review their tax affairs, particularly if the property has significantly appreciated in value since acquisition. If you owned the property on 9 May 2017, and sell on or before 30 June 2020, the new rules do not apply.

If you have any questions, please contact one of our tax lawyers:

Edward Hennebry
Associate
T +61 3 9611 0113
E: ehennebry@sladen.com.au

Neil Brydges
Principal Lawyer | Accredited Specialist in Tax Law
M +61 407 821 157 | T +61 3 9611 0176
E: nbrydges@sladen.com.au