A knee-jerk reaction from the Federal Government, says expat adviser.
"The Federal government's proposed scrapping of the capital gains tax exemption for Australians residing overseas is predicted to affect over 100,000 expats. The proposal is considered by expats to be the most lucrative government 'cash grab' this decade," said Alfred Moller, Expat Lending Specialist at Omniwealth.
Working Australians who live overseas are at risk of losing their capital gains tax exemption on their Australian main residence if they sell the property while overseas. However, many argue that Australian expats deserve to have corresponding rights to dispose of their main residence without paying capital gains tax.
The legislation is yet to pass and with the June 2019 deadline looming, the stakes for Australian expat families could not be higher. The main criteria will be their residency status when the property is sold.
Three simple questions can be considered to understand whether Australian expats will be affected by the proposed changes:
1. Are you planning to move back to Australia?
2. Are you intending to move into your Australian family home, upgrade or downgrade?
3. What is your intended time frame for the above?
"Understanding your intentions and speaking to your tax adviser can reduce any capital gains tax payable," said Mr Moller.