Your ‘main residence’ (your home) is generally exempt from Capital Gains Tax (CGT). To be entitled, the property must have a dwelling on it and you must have lived in it.
Proposed new legislation affecting foreign owners
Currently, if you are a foreign resident, you are entitled to the main residence exemption in the same way as individuals who are residents of Australia (for tax purposes).
However, as promised in the 2017-2018 Federal Budget announcement, a bill has been introduced to Parliament which could change this. It was passed in the House the Representatives on 1 March 2018 and is now proceeding to the Senate.
The bill is the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No 2) Bill 2018.
It proposes to remove the Capital Gains Tax exemption for the sale of a main residence by a foreign resident.
The New Rules
If the Bill passes:
- from 7:30pm (AEST) 9 May 2017, individuals who are foreign residents at the time they enter into contracts to sell their main residence will not get the exemption, subject to transitional rules.
- Transitional rules apply so that the exemption will continue to apply if the main residence –
- was held by a foreign resident before 9 May 2017; and
- is sold by 30 June 2019.
What can I do if I am a foreign owner?
If you believe you are affected by the changes to the CGT Main Residence Exemption, you should contact our team to discuss your options.
The information provided in this article is for general information and educative purposes in summary form on legal topics which is current at the time it is published. The content does not constitute legal advice or recommendations and should not be relied upon as such. Whilst every care has been taken in the preparation of this article, FC Lawyers cannot accept responsibility for any errors, including those caused by negligence, in the material. We make no representations, statements or warranties about the accuracy or completeness of the information and you should not rely on it. You are advised to make your own independent inquiries regarding the accuracy of any information provided on this website. FC Lawyers does not guarantee, and accepts no legal responsibility whatsoever arising from or in connection to the accuracy, reliability, currency, correctness or completeness of any material contained in this article. Links to third party websites or articles does not constitute any endorsement or approval of those sites or the owners of those sites. Nothing in this article should be construed as granting any licence or right for you to use that content. You should consult the third party’s terms and conditions of use in relation to any third-party content. FC Lawyers disclaims all responsibility and all liability (including liability for negligence) for all expenses, losses, damages and costs you might incur as a result of the information being inaccurate or incomplete in any way. Appropriate legal advice should always be obtained in actual situations.
Prefer to get in touch?
With offices in Brisbane, Sunshine Coast, North Queensland and Sydney, our team is well equipped to provide both advice and support across a broad range of legal areas.
