CGT main residence exemption is removed from 30 June 2020 for Foreign Residents

January 21, 2020

Foreign residents will be no longer claim the CGT main residence exemption upon disposal from 30 June 2020. The new legislation has removed the main residence exemption for foreign residents for tax purposes.

What is a foreign resident?

Some of the factors that can be used to determine residency status include:

  • physical presence, such as living in Australia for at least 183 days continuously or with breaks in a year.
  • intention and purpose.
  • family
  • business or employment ties
  • maintenance and location of assets
  • social and living arrangements.

Therefore, you may be a foreign resident even you are an Australian citizen or permanent residency visa holder.

There are still limited circumstances that you can claim the  CGT main residence exemption if you meet the following conditions:

  • you have been a foreign resident for tax purposes for a continuous period of six years or less, and during the time one of the following occurred:
  • you, your spouse, or your child under 18, had a terminal medical condition
  • your spouse, or your child under 18, died
  • the CGT event involved the distribution of assets between you and your spouse as a result of your divorce, separation or similar maintenance agreements.