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New Oz property capital gains tax law forces rushed sales of prestige Sydney homes
| Published: | 18 Feb at 6 PM |
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Expat and foreigner home owners of prestige properties are rushing to get them sold before Oz’s new tax exemption laws kick in.
Expatriate and foreign owners of a selection of Sydney’s most upscale real estate are besieging property agents with demands their homes must be sold before June 30 this year, the date on which they will no longer be able to claim capital gains tax exemption on capital appreciation. The new law covers both Australian nationals living and working overseas and expats from other nationalities who’ve bought prestige homes in the capital.
Australian real estate agents are expecting a rush to sell over the next few weeks as the deadline draws nearer, with owners attempting to get their investments back without having to pay tax on the considerably increased value of their homes since they were purchased. According to agents, there’s been a huge surge in upscale property prices over the past few years, with the new rule meaning a high proportion of buyers' realised capital gains will be grabbed by the Australian taxman. Everyone is now attempting to find buyers and complete the process in time.
The law itself, named the Treasury Laws Amendment Bill, was passed in 2017 as a solution to the problem of housing affordability but has not yet passed the Australian Senate, although the government is insisting it’s proceeding as normal. Its opponents, however, are claiming still existing issues such as the bill’s retrospective nature as regards its tax entitlements will need to be resolved before it passes into law. Opposing lawmakers are also claiming the bill is yet another instance of the government’s bungling of the housing policy itself.
Confusion over the bill has already resulted in wealthy buyers changing their minds about living long-term in their homes or returning to them after a stint working overseas. According to lawyers, the new regulations are especially off-putting for non-resident Aussies who’ve owned their homes for many years. A representative from Christies' International is claiming it’s also deterring wealthy expats from even considering buying into the Australian property market as, for those who’re regularly posted overseas for a few years, there’s no allowance made for the time spent in residence, even if it’s been long-term.
Expatriate and foreign owners of a selection of Sydney’s most upscale real estate are besieging property agents with demands their homes must be sold before June 30 this year, the date on which they will no longer be able to claim capital gains tax exemption on capital appreciation. The new law covers both Australian nationals living and working overseas and expats from other nationalities who’ve bought prestige homes in the capital.
Australian real estate agents are expecting a rush to sell over the next few weeks as the deadline draws nearer, with owners attempting to get their investments back without having to pay tax on the considerably increased value of their homes since they were purchased. According to agents, there’s been a huge surge in upscale property prices over the past few years, with the new rule meaning a high proportion of buyers' realised capital gains will be grabbed by the Australian taxman. Everyone is now attempting to find buyers and complete the process in time.
The law itself, named the Treasury Laws Amendment Bill, was passed in 2017 as a solution to the problem of housing affordability but has not yet passed the Australian Senate, although the government is insisting it’s proceeding as normal. Its opponents, however, are claiming still existing issues such as the bill’s retrospective nature as regards its tax entitlements will need to be resolved before it passes into law. Opposing lawmakers are also claiming the bill is yet another instance of the government’s bungling of the housing policy itself.
Confusion over the bill has already resulted in wealthy buyers changing their minds about living long-term in their homes or returning to them after a stint working overseas. According to lawyers, the new regulations are especially off-putting for non-resident Aussies who’ve owned their homes for many years. A representative from Christies' International is claiming it’s also deterring wealthy expats from even considering buying into the Australian property market as, for those who’re regularly posted overseas for a few years, there’s no allowance made for the time spent in residence, even if it’s been long-term.
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