The removal of the main residence exemption for foreign residents was announced on 9 May 2017. The measure was discussed in a previous newsletter article. The bill that was originally introduced lapsed when the federal election was called earlier this year, but was reintroduced to the House of Representatives on 23 October 2019 as the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures) Bill 2019.
The bill is very similar to that discussed in our earlier article, with the key changes being:
- The transitional period will be extended to 30 June 2020, meaning that properties that meet all the conditions for main residence exemption that were acquired before 9 May 2017 and are sold prior to 30 June 2020 will still qualify for the exemption.
- Some quite limited exceptions to allow a foreign resident to continue to access the main residence exemption for CGT events concerning certain “life events” (eg terminal medical conditions, death of a spouse or child, or family law matters) if they have been a foreign resident for six years or less at the time of the CGT event.
If you don’t currently live in Australia but still own a property that was your family home prior to 9 May 2017, you should give urgent consideration to your options in relation to the property, and we suggest you call us to discuss your circumstances.