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Changes in Aussie CGT june 30 2020

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  1. #11

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    Quote Originally Posted by jrkob
    Thinking of it... I'm wondering if this is not kind of the norm anyway globally, for those countries that have capital gain tax on property ? From where I am, everybody pays capital gain tax on properties: national tax residents, national tax non-residents, and foreigners. Can't escape.
    It is the same from where i am, resident/non-resident all treated equally on capital gain tax however there are exemptions available for all to reduce/avoid CGT which is a different matter altogether..

  2. #12

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    Just another greedy tax grab by another greedy Western government


  3. #13
    bdw
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    The issue here is that all normal Aussies, living in Australia do NOT pay any CGT when selling their primary residence. They only pay it when selling investments. In the case of Australian expats living overseas, they have been able to class their home back in Aus as a place of primary residence while living overseas, even if renting it out as an investment whilst they are overseas, therefore have been able to get the exemption that normal Aussies get. Now they won't.

    I knew about these upcoming changes for a while but has never bothered me because I've not had any intention to sell any of my Aussie properties.

    Just as a side note, another trick some Aussies do when they flip properties and renovate it, buy it, live in it for 6 months while renovating, sell it, dont have to pay CGT because its their primary residence. Then move onto the next one, you can continually buy and sell properties like this and never pay any capital gains taxes as long as you live in it for at least 6 months. So you can do 2 properties a year, make a living out of this and don't pay any CGT.

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  4. #14

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    Quote Originally Posted by bdw
    In the case of Australian expats living overseas, they have been able to class their home back in Aus as a place of primary residence while living overseas
    In simple terms, how is this achieved ?

  5. #15
    bdw
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    Quote Originally Posted by jrkob
    In simple terms, how is this achieved ?
    Honestly not sure because I never sold an Australian property whilst I lived overseas. I always just hold on to my property. But as far as I know, Australian's still need to lodge a tax return every year (even if not tax resident, living overseas and not subject to pay Australian taxes on their income) so somewhere in there a property sale will trigger a CGT event and there must be a way to claim the exemption due to being a place of primary residence.

  6. #16

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    Quote Originally Posted by jgl
    Perhaps I am missing something here, but for someone intending to return to Australia to live and who doesn't intend to sell their 'main residence' before that return, I don't see the big deal.

    The retroactive part of it totally sucks, but if you're definitely planning to move back, then I don't see how this changes things.

    Personally, I don't agree with the captial gains exemption anyway (though I'd take advantage of it if it was possible).
    France limits capital gains relief to principal residences only, which naturally excludes non-residents. It is, being French, far more complicated than that, but in absolute simplistic terms that is how it operates. The retrospective nature of this Australian change seems quite harsh though

  7. #17
    jgl
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    Quote Originally Posted by bdw
    Just as a side note, another trick some Aussies do when they flip properties and renovate it, buy it, live in it for 6 months while renovating, sell it, dont have to pay CGT because its their primary residence. Then move onto the next one, you can continually buy and sell properties like this and never pay any capital gains taxes as long as you live in it for at least 6 months. So you can do 2 properties a year, make a living out of this and don't pay any CGT.
    I know it's common, but this kind of thing really pisses me off, even if I can understand why people do it. It's such a totally blatant tax dodge.
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  8. #18

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    Quote Originally Posted by jrkob
    In simple terms, how is this achieved ?
    this?

    https://www.ato.gov.au/general/capit...-you-move-out/


    I'll be buying a property in aus pretty soon and rent out my hk one. On the basis of the above clause , I should be able to treat my HK property as main residence for cgt purposes , if that happens and I meet their conditions. Meanwhile my aus property will be subject to cgt when it happens. Does that sound right?
    Last edited by Jaz Paul; 27-02-2020 at 04:53 PM.
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