Aussie expats facing massive tax bills when selling a home have won more time to put their finances in order.
The government is extending the deadline on a capital gains tax exemption that allowed them to pay no CGT when selling a main home in Australia from overseas.
The controversial measure was announced in the coalition government’s 2017-18 budget in a bid to raise an extra Aus$580 million in taxes by scrapping the exemption for Aussie tax payers living and working overseas.
Around 100,000 households were impacted by the rule change.
Expats have already won one stay on cancelling the exemption prior to the general election earlier in 2019.
New deadline for taxing expat home sales
After the coalition’s election victory, Treasurer Josh Frydenberg reiterated the tax changes remained government policy.
Now, Assistant Treasurer Michael Sukkar will put redrafted legislation before Parliament extending the deadline for property sales to June 30, 2020.
“Importantly, the bill does not affect Australian tax residents,” said Sukkar.
“Under the changes, from May 9, 2017, foreign residents will no longer be able to access the main residence capital gains tax exemption, other than when a specific life events occurs if a person is a foreign resident for a period of six years or less.
“Grandfathering arrangements will apply to properties owned on May 9, 2017 and will enable foreign residents to access the existing main residence exemption if they sell that property by June 30, 2020.
Tax change punishes expats for no reason
“This represents a 12-month extension to the grandfathering arrangement announced in the 2017-18 budget and means that foreign residents will have had over three years to consider and plan their affairs.”
Expatriates in Hong Kong have launched a global protest against the new tax law, arguing the government is punishing professionals for working overseas.
The effect, they say, would make recruitment to overseas offices harder for Australian companies.
“I understand the government needs to look at ways to kerb foreign investment but to hurt Australians living offshore and penalising them for living offshore defies logic,” said Jacinta Reddan, chief executive of the Australian Chamber of Commerce in Hong Kong,