Expats living in Australia have lost a generous tax break which could be used when selling a property. The Australian government is scrapping a capital gains tax concession which non-resident taxpayers have been able to use when selling a property in the country.
Non-resident taxpayers previously enjoyed a 50 per cent capital gains tax (CGT) concession when selling a home in Australia. However, the Daily Telegraph reports that this perk Ã¢â¬Ëis to be scrapped by the Australian government, which has backdated the tax grab to May 8, 2012.Ã¢â¬â¢
Capital gains tax concession to be scrapped on property in Australia
The change to the law means that if you own an Australian property for more than one year, all profits accruing after May 8, 2012 to the point of sale will be subject to taxation, rather than just 50 per cent of the gain.
The Telegraph reports that Ã¢â¬Ëthe tax change is complicated because expats can still use the 50 per cent concession on any capital gain built up before the cut-off. However, to do this they will need to get a certified valuer to obtain an independent market valuation of the property as at May 8, 2012.Ã¢â¬â¢
Steve Douglas, managing director of Australasian Taxation Services, said: "Make sure you give your valuer proper instructions. This is not a conservative bank valuation but rather a true optimistic assessment of the best value the property is considered to be worth.
"Be sure your valuer understands this as it can make a big difference in your future tax position."
The change to the capital gains
tax rules is just one of the ways that the Australian government is clamping
down on non-residents with homes in the country. It also plans to scrap the living away from home allowance
(LAFHA) from October 1.
Author: Nick Marr