Main Residence – Expat – Property and CGT

Bob used to be an Australian tax resident and is now a non resident for tax purposes. What happens when he sells a property that was his main residence in Australia.

Well they certainly haven’t made it easy for individuals who have become non residents for Australian tax purposes.

If a taxpayer had genuinely occupied a dwelling as their main residence then they cease to occupy it for a period of time then the issue becomes a little complex.

Is Bob eligible to use the 6 year rule or first used to produce income rule ? It will probably depend on when Bob sells the property.

A change in law on 12 December 2019 means if you are a foreign resident for tax purposes at the time you dispose of your residential property in Australia, you will not qualify for exemption from CGT unless you satisfy the life events test.

If Bob sells the property while he is non resident he does not qualify for the main residence exemption at all. This would mean that the 6 year absence rule and first used to produce income rule should not apply as one of the conditions that needs to be satisfied to apply this rule is that Bob would qualify for an exemption under the main residence rules.

If he comes back to Australia and re-established tax residency status this changes that same situation.

Leave a Reply