Denial of CGT main residence exemption for foreign residents – amendments

The government previously announced that Australia’s foreign resident capital gains tax (CGT) regime will be extended to deny foreign and temporary tax residents access to the CGT main residence exemption.

A few weeks ago, that Bill was reintroduced to the Lower House with some amendments;

  • The reintroduced Bill brings stronger rules for foreign residents owning Australian housing but also for Australian expats who become foreign residents for tax purposes. The reintroduced Bill provides an amendment that will not remove the Capital Gains Tax exemption if a foreign resident has a “life event” within six years of becoming a foreign resident. Those life events are:
    • A certified terminal medical condition for the foreign resident, their spouse or a child under 18 years of age
    • The death of the foreign resident, their spouse or child under 18 years
    • A divorce or separation that requires a disposal or dealing in the main residence between the foreign resident and their spouse
    • The measures apply to CGT events happening at or after their announcement at 7.30 pm, by legal time in the ACT, on 9 May 2017. However, under grandfathering provisions, properties held prior to this date will only be affected by the measures if subject to a CGT event after 30 June 2020.