New Zealand expatriates who sell their family home in Australia could face a large tax on any capital gains.
01 June 2017
The Bill to implement part of the Budget measures (CGT) was introduced yesterday. The measures will only prevent foreign tax residents from claiming the CGT main residence exemption, and not temporary residents.
New Zealanders residing in Australia are generally not foreign residents, and therefore not captured by the proposed changes to CGT. Please seek financial advice to confirm your tax liability when selling property.
Oz Kiwi opinion
As we’ve noted previously, it is not entirely clear what the Australian Government’s intention was in including these changes in the Budget.
We are hoping that the potential for these changes to affect New Zealanders living in Australia (rather than merely ‘foreign property investors’) is an oversight on the part of the Australian Government that can be corrected before they are finalised.
We’ll keep you informed of further developments.
Kiwis face new tax on house sale profits in latest Australian policy surprise
23 May 2017
Isaac Davison – NZ Herald
The Australian Budget earlier this month removed an exemption from capital gains tax on a main residence for foreign and temporary tax residents.
New Zealanders who already own a home would not have to pay the tax if they sold the home before 2019.
Oz Kiwi chairman Timothy Gassin said expats could have to pay a tax of up to 50 per cent on any profits under the proposed changes, which is still being considered by the Australian Treasury.
He said many Kiwis living in Australia were classed as “temporary tax residents” and would therefore be captured by the Budget change.
It was not clear whether the policy intentionally targeted New Zealanders, he told Radio New Zealand.
“What we’re really trying to determine is, did [the Australian Government] actually think this through? Was this intentional or have Kiwis just been caught up in what’s really a policy that is supposed to be targeting foreign property investors, rather than people who are based here?”
It is not yet known whether the New Zealand Government was notified of the policy change.
Prime Minister Bill English said this morning he had not seen any details about the proposal.
“Anyone who lives in Australia, of course is subject to the Australian Government’s Budget decisions. And if they’re acting on foreign buyers or non-resident taxpayers … then it’s possible Kiwis are caught up in that.
Watch the Gerry Brownlee and Julie Bishop press conference
“But I haven’t seen any particular advice about the proposal.”
English said Kiwis were being sent a clear message that “there isn’t the same safety net in Australia that there used to be”.
Foreign Affairs Minister Gerry Brownlee has been asked for comment.
Brownlee received an assurance just three weeks ago that New Zealand would be told of any policy shifts which affected New Zealanders living in the country.
That assurance came after New Zealand expressed frustration with the lack of notice for major immigration and education changes announced in the last two months.
[Read the NZ Herald article].