Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures) Bill 2019 has now been introduced in Parliament, bringing back a measure to deny the main residence exemption to foreign residents.
The measure, first announced in the 2017–18 budget, proposes to deny non-residents the CGT main residence exemption for CGT events that happen on or after 9 May 2017, subject to an extended 30 June 2020 transitional date.
The previous iteration of the bill had set the transitional arrangements to 30 June 2019, but that bill lapsed with the calling of the May federal election.
Under the new bill, individuals who have been foreign residents for a period of six years or less may be able to access the CGT main residence exemption if, during the period of that foreign residency, certain life events occurred.
A life event includes a terminal medical condition to the foreign resident, their spouse or their child under 18 years of age; death; and divorce or separation.
The measure was previously subjected to considerable backlash from the tax and expat community, with concerns raised over the retrospective impact in denying the main residence exemption as far back as 20 September 1985, when CGT was first introduced.
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.