The family home is usually your biggest asset, and one example that highlights the importance of making appropriate arrangements before heading off overseas is the recent proposed changes to capital gains tax (CGT) and the main residence exemption.
If passed, the changes will mean that if you move overseas and rent out your family home, and then decide to sell your home back in Australia while still overseas, you will need to pay CGT on the proceeds of the sale.
Previously, there was a “six year absence” rule, which meant that if the home was sold within six years of moving overseas, it would be exempt from CGT. While these changes haven’t yet been passed into law, they have the support of both parties. The new rules are expected to apply from 1 July 2019.
The Implications of Changing Residency Status for Tax Purposes
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