A crucial reminder for foreign residents: The transitional period to sell your previous Australian main residence and comply with the necessary tax regulations will conclude on 30 June 2020. It is advisable to consult a tax accountant to ensure you meet all the requirements within the given timeframe.
Full details of this change were discussed in previous newsletters, but in summary, if you don’t currently live in Australia but still own a property that was your family home before 9 May 2017:
- If you exchange contracts before 30 June 2020 to sell the property, the main residence exemption will still be available in whole or on a pro rata basis.
- Suppose you become an Australian resident again and sell the property while you are an Australian resident. In that case, the main residence exemption will still be available on a whole or pro rata basis.
- If you sell the property after 30 June 2020 and are not an Australian resident at the time of sale, the main residence exemption WILL NOT be available. Capital gains tax will apply to the entire capital gain without the benefit of the 50% CGT discount only available to Australian residents.
You’ll find more details on the new rules on the ATO website here.
If you have concerns or queries about this change, please get in touch with us urgently.
Kreston Stanley Williamson Team
*Correct as of June 2020
Disclaimer – Kreston Stanley Williamson has produced this article to serve its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas in this article, you must seek advice about your circumstances. Liability is limited by a scheme approved under professional standards legislation.
