Changes to capital gains tax for Australian ex-pats renting out their previous home.
Changes to Australian CGT laws are a major change for non-resident property owners.
The trap is that principal residence exemption is removed for anyone who is not an Australian resident and sells a property after 30 June 2020 that was previously their residence. For example, Australian residents could have bought a property in 1990 and lived in it as their principal residence until they left Australia in 2018 and rented it out. If they sell when they are non-residents, they would be liable to capital gains tax on the entire profit from 1990 to the date of sale, instead of only the increase in value from 2018 to the date of sale.
If you have any questions about these changes and how they impact on you then please click here to ask or call Geoff Trewarn on +613 9877 7117
Legislation and supporting material
The Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 2) Bill 2018External Link was introduced to parliament on 8 February 2018. The bill lapsed when the 2019 election was called.
The Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures) Act 2019External Link received royal assent on 12 December 2019.
See also: Capital gains withholding: Impacts on foreign and Australian residents