On 23 October 2019 the Federal Government reintroduced draft legislation to remove the Main-Residence Exemption on sales of Australian property by non-Australian owners.
This proposed change was originally announced in 2017-18 Federal Budget but prior to passage of the Bill being passed through both Parliamentary houses, the May 2019 election was called, and the draft legislation lapsed. The fate of this legislation was uncertain until last week when a new draft Bill was reintroduced to Parliament.
If the bill is passed in its present form, it is effectively retrospective for properties acquired after 7.30pm on 9 May 2017, but transitional rules are available for properties acquired before that date, so that sales up to and including 30 June 2020 will still qualify for main-residence exemption.
For sales of properties after 30 June 2020, properties acquired before 7.30pm on 9 May 2017 will only qualify for main-residence exemption where both of the following apply:
1) The taxpayer has been foreign-resident for 6 years or less at the time of the property sale and
2) A qualifying "life event" has occurred during the foreign-resident period.
Qualifying "life events" include a terminal medical condition, death of a minor child or divorce or separation.
If you need advice on whether you will be impacted by the reintroduction of this proposed legislation email Joanne Lamberth lamberthj@tax.uk.com
