The Treasurer has recently released exposure draft legislation
(Treasury Laws Amendment (Housing Tax Integrity) Bill
2017) in relation to removal of the CGT main residence
exemption for foreign residents. The changes are part of the
Commonwealth Government's 'housing affordability'
reforms announced in the 2017-18 Budget.
This will affect both Australian tax residents who resided in an
Australian property and then became expat, as well as foreigners
who never became Australian tax residents as defined, but
established a main residence in an Australian property as a
question of fact.
If the changes are implemented, then there will be limited
opportunities for foreign residents to access the CGT main
residence exemption after May 2017, however careful and timely
planning may result in significant CGT savings. The same applies
for Australian tax residents, who intend to become expats.
