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With so much confusion and misinformation on the changes to Capital Gains Tax for expats, we have recorded a seminar covering all the issues and how to plan for minimum impact to your circumstances.
Last year we were quite excited that the proposed laws affecting Capital Gains Tax on an expats former home were lapsed with the calling of the election, due largely to Austcham HK and our efforts. Sadly, despite promises from both major parties to review the laws and exclude expats, the amended legislation was represented in November and quickly passed through both houses into law in late 2019. There were concessions to provide exclusions on sales as a result of death, divorce or financial hardship but they have left the law as broad to capture expats and foreigners.
The first and most important thing to note is that these changes will not affect you unless you actually lived in the property before you left Australia and became a non-resident taxpayer.
Secondly, these rules will also not impact you if you sell your former residence either before 30 June 2020 or after you return to live in Australia once again. Note, return means full and proper relocation, not just back for a holiday.
The danger zone is anyone who has lived in their property before and previously was entitled to capital gains tax free status, who may now sell their property during a period of living overseas. If that happens, then the full capital gain will be subject to tax.
It will take a long time for people to understand this, especially if they are newly departed from Australia in the coming years. They may well be unaware of the rule changes and assume their family home is tax free. Now, more than ever, is the time to remember to seek advice before selling your property so you can fully understand any potential tax implications.
If you are considering selling your former family home in the near future, you should seriously consider a sale prior to the 30 June 2020, as the previous tax-free status will still apply. If not, then you may be advised to wait to sell until after you are living back in Australia. If you are unsure of how this may impact you, or if you want to consider selling your property before the change deadline, simply contact us for assistance.
Australasian Taxation Services
#17-01 Sim Lim Tower, 10 Jalan Besar 208787, Singapore
Phone: +65 6293 3858