The Federal Government is set to bring in targeted changes to legislation designed to hit expat Australians’ capital gains tax exemption for family homes.
The Government has plans to end the main residence CGT exemption for taxpayers who sell their homes while living overseas but is facing increasing global opposition and federal Labor has joined in, asking Treasurer Josh Frydenberg to ensure it doesn’t have unintended consequences.
Some experts are warning the plan is an unfair and retrospective move and could lead to further erosion of long-held homeowner exemptions.
The plan would affect around 100,000 Australians currently living and working overseas and the Government wants debate on the matter to finish by the end of the year,
“The Government plans to introduce targeted amendments to address this issue, for example when a foreign resident is terminally ill or dies within a specific timeframe of losing their Australian tax residence,” Treasurer Frydenberg told Australian Financial Review.
Not everyone is happy about the changes, including high profile Australian Tax Office critic and barrister Graeme Halperin who told AFR the moves were unjustifiably bad policy and would act as a disincentive to Australians to live and work overseas.
It is feared by some expats the changes will make it even harder to afford a family home and that the retrospective nature of the change would see them having to pay CGT on their properties even for years they lived in it as Australian resident taxpayers.