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CGT property when overseas

Does CGT Apply When You Leave the Country?


Aug 25, 2016


Do you have plans to leave the country? Adelaide accountant Kym Nitschke explains what you should do with your properties.

When people leave Australia to live overseas, they usually hold onto their homes. This is so that they can come back to it whenever they need to. Likely, you already know that Capital Gains Tax (CGT) doesn’t apply to main residences. If you sell your home while it’s still your main residence, then you don’t have to pay CGT.

What if you want to rent out your property while you spend some time abroad?

It’s fine to claim your home as your main residence while renting it for up to 6 years.

After that, it will be considered an investment property. This means that should you choose to sell your home after renting it for over 6 years, then Capital Gains Tax will apply.

However, simply keeping that property – and no other – as your main residence means that you can sell it anytime you like, CGT-free.

Whether for study, work or simply a change of scenery, you probably have a good reason for leaving the country for a while. You should still be able to manage your property just as you would here in Australia.

No longer an Australian national?

The situation changes a bit if you stop being an Australian resident while overseas. In this case, the ATO is going to view some of your assets as CGT-applicable.

As of 12 December 2006, renouncing residency means that you essentially dispose of your assets at their market value. At the same time, you also re-acquire indirect Australian real property interests and options, or at least the rights to acquire such interests for their market value.

Get some more financial advice before planning your next stint abroad!

Contact Nitschke Nancarrow at (08) 8379 9950 or by sending me an email.

– Kym Nitschke

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