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Hi @liztindall
Even if your capital gain is exempt because it's a main residence, you'll still need to report it on your tax return. It'll look like this:
- Include your main residence capital gain under Total current year capital gains.
- Remove it from your Net capital gain.
- Say YES to Have you applied an exemption, rollover or additional discount?
- Select I: Main residence exemption for the exemption type.
You then include the credit that was withheld from the sale (the 12.5%) under Credit for foreign resident capital gains withholding amounts.
You can read about completing the myTax capital gains or losses section on our website.
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Hi @JaneTuppence,
If an Austrtalian resident is selling their PPR and it's estimated to sell for $750,000 or more, then they'll require a clearance certificate.
Although Australian residents are eligible for the main residence exemption, they'll still need to provide a clearance certificate if their sale value of the property is more than $750k. If they don't provide one, the purchaser would need to withhold 12.5% of the purchase price to us under the assumption they're a foreign resident. The point of the clearance certificate is to clear Australian residents from withholding.
It isn't enough to show proof of Australian residency (such as birth certificates or citizenship certificates). Residency for Home Affairs purposes is different to tax purposes.
Even if you use the property currently as a main residence, you may not have previously. This would make the property partly liable for CGT. In this case, you'd still get a clearance certificate, but the tax is worked out and paid on your income tax return instead.
This process makes sure that foreign residents meet their taxation obligations on large sales of property. The intention is to make sure that everyone plays fair.
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