You may have lived in Australia, bought a house and lived in it over a period of time. You have since moved overseas for work or to be with family and are no longer a tax resident of Australia, but you still own your Australian property. If this sounds like your situation, then you need to understand the recent legislative changes.
The Government has passed legislation denying the main residence exemption for non-residents. The change in legislation means that if you were to sell your Australian property whilst you are still a non-resident for tax purposes you will receive no main residence exemption. This could significantly increase the amount of tax you pay on the sale of the Australian property.
If you are lucky enough to eventually return to Australia, become a resident for tax purposes again and then sell the property, you will be entitled to the main residence exemption.
If you have no intention of returning any time soon, the legislation was passed with a transitional rule, allowing non-residents who owned property prior to 9 May 2017 (when the change was initially proposed) to sell their property prior to 30 June 2020 and still use the old rules. We are less than 4 months from this 30 June 2020 deadline.
Whilst tax is only one consideration in selling any investment, if you had been thinking about selling the property, now may be the time.
If you would like to discuss this measure further or calculate the estimated tax saving if you sold the property prior to 30 June, contact Kennedy Barnden.