A lot of expats will be cashing in their Australian investment properties to avoid the Federal Government's controversial new Capital Gains Tax legislation which passed through the Senate in December.

During the 17-18 Federal budget changes were made to capital gain tax exemptions for Australian property owners living overseas. Expats now have until the end of June this year to sell their homes if they want to avoid big capital gains tax bills reports Nassim Khadem from the ABC

For decades, Australians living abroad have been able to claim the capital gains tax (CGT) exemption on the family home.
This exemption was available so long as the home was rented out for no more than six years at a time.
But in early December the Federal Government finally passed through the Senate its $581 million plan to change CGT arrangements for people living overseas.
The law basically eliminates the CGT exemption for Australian expatriates that has been in place since September 20, 1985.
It means that potentially thousands of Australians will be hit with capital gains tax if they sold their property while a resident overseas, and the tax bill will date back from the time the owner purchased their home, not the point at which they moved overseas

Key points:

The Federal Government saw the controversial law pass through the Senate in early December
The change means thousands of Australian expats could be up for hefty capital gains tax bills
Tax experts argue the measure is draconian and may force expats to return to Australia and sell their homes before June 30

Expats who want to sell ahead of the June deadline should consider putting their property on the market earlier in the year to allow for time to give the required notice to the tenants regarding the intention to sell the property and coordinate access for professional photography, inspections, etc as well as allowing reasonable time to sell the property.

Otherwise, if left until closer to the end of June it’s likely that there will be a flood of expats trying to cash-out of their investment properties in Australia prior to the deadline.

Be careful, I anticipate that during May and June there will be a lot of astute investors ready and waiting to pounce hoping to capitalise on any opportunity to target those expats who have left it to the last minute who will be more desperate to sell ahead of the time sensitive deadline.

For more detailed information about the impacts of this legislation make sure you read this article from Nassim Khadem

If you have any questions regarding this new legislation or if you’re wondering what is the best way forward feel most welcome to contact me.

I hope you find this information helpful.

Regards

Greg Vincent