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ARTICLE · 21 APRIL 2020

CGT main residence exemption for foreign residents … enjoy it while it lasts

Bartier Perry Solicitors
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A foreign resident will no longer qualify for the CGT main residence exemption unless certain criteria are satisfied.

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Lisa To
Lisa To
Peter Kramer
Peter Kramer
Jeremy Tjeuw (Formerly With Bartier Perry)
Jeremy Tjeuw (Formerly With Bartier Perry)
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Background

On 9 May 2017, the Federal Government announced it would "deny... foreign ... residents access to the Capital Gains Tax (CGT) main residence exemption from... 9 May 2017, however existing properties held prior to this date will be grandfathered until 30 June 2019...".1

On 8 February 2019, a bill2 was introduced to Parliament to remove the entitlement to the CGT main residence exemption for foreign residents. A revised bill 3 was introduced to Parliament on 23 October 2019 and subsequently enacted into law on 12 December 2019.4

Broadly, the effect of the changes is that a foreign resident will no longer qualify for the CGT main residence exemption unless both of the following criteria (referred to as the "Life Events Test") are satisfied:

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