I thought I had this but Im back to being confused. I live in Australia as an Australian resident but I have a New Zealand property which I am looking to sell. This used to be my home when I lived in NZ around 20 years ago. I moved to Australia in 2014. The value of the NZ property back then was $570k. Today it is likely to sell for $880k. I understand I am only taxed on the value of the property at the time I cam to Australia in 2014 which back then was $570 and what I sell it for today $880. Thus the taxable componet is $310,000. I further understood that if I am an Australian Resident for more than 12 months (which I am) then I qualify for 50% discount, thus only taxable on half of the $310,000 capital gains which would be $155,000. For the period 1 July 2025 to end June 2026 I have not worked as my sister developed a brain disease and I have been looking after her. As such I have had no income from 1 July 25 to 30 June 26. I dont claim any benefits. If I sell the property by the end of June for $880k is it correct that I would be taxed on the $155k as per above? The tax component would be $21,888 based on $155k ($0 tax up to $18,200, $4,288 tax from $18,201 to $45k based on 16%, $27,000 tax from $45k to $135k at 30% and finally a further $7,400 in tax from $135k to $190k bracket at 37%). Total amount of tax to pay = $21,888. Can someone tell me if I have calculated all this correctly? My brain hurts.
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Thanks so much for your reply. I was getting myself so bamboozled. I am an Australian tax resident so I based my calculations on this and Im so relieved that I pretty much did have the calculations right. Regarding the valuation of the property back in 2014, will an Estate Agents valuation suffice? I was actually considering selling at the time which is why I know what it was valued at back then, so hoping the valuation provided back then would be sufficient.
Can I also ask do I need to provide my bank or maybe the ATO some advice or document stating that a large sum will be deposited into my Australian bank account due a house sale? Or is this just covered in my tax when this gets submitted?
Thanks so much, very very appreciated.
Fiona
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Best to see a tax agent or ask ATO's private ruling/technical advice
First issue - Tax Residency
- If you are a temporary tax resident - then unlikely overseas assets are taxable in Australian tax
- "Foreign and temporary residents are subject to capital gains tax (CGT) only on taxable Australian property."
- Being temporary tax resident also means you don't have CGT discount for days after 8 May 2012 (though this shouldn't be a problem since overseas asset usually are not taxed in Australia)
Can someone tell me if I have calculated all this correctly? My brain hurts.
- Assuming you are Australian tax resident and not temporary resident
- 'The value of the NZ property back then was $570k'
- best to obtain a valuation report
- '$570 and what I sell it for today $880. Thus the taxable componet is $310,000'
- assuming those numbers for proceeds and cost base, yes that would be the Gross Capital Gain
- 'I further understood that if I am an Australian Resident for more than 12 months (which I am) then I qualify for 50% discount, thus only taxable on half of the $310,000 capital gains which would be $155,000.'
- The 50% discount is right but your assessable gain not necessarily. You forgot main residence exemption, might be able to apply
- https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home/treating-former-home-as-main-residence
- 'Total amount of tax to pay = $21,888'
- For income tax yes
- There's also 2% medicare levy and the applicable medicare levy surcharge rate
- Capital gain is a part of your taxable income
Thanks so much for your reply. I was getting myself so bamboozled. I am an Australian tax resident so I based my calculations on this and Im so relieved that I pretty much did have the calculations right. Regarding the valuation of the property back in 2014, will an Estate Agents valuation suffice? I was actually considering selling at the time which is why I know what it was valued at back then, so hoping the valuation provided back then would be sufficient.
Can I also ask do I need to provide my bank or maybe the ATO some advice or document stating that a large sum will be deposited into my Australian bank account due a house sale? Or is this just covered in my tax when this gets submitted?
Thanks so much, very very appreciated.
Fiona
Best to see a tax agent
My bad, I should have added in a question. Are you a temporary tax resident?
Being an Australian tax resident doesn't necessarily mean can't be temporary tax resident
will an Estate Agents valuation suffice?
- Don't know
- The valuation report would need to follow ATO's guideline for a market valuation report, and there's a more detailed link on the page
- https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/market-valuation-of-assets#ato-Whatamarketvaluationreportshouldinclude
- https://www.ato.gov.au/law/view/document?DocID=SGM/market_val&PiT=99991231235958
Can I also ask do I need to provide my bank or maybe the ATO some advice or document stating that a large sum will be deposited into my Australian bank account due a house sale? Or is this just covered in my tax when this gets submitted?
- Generally, don't need to notify ATO, it's a self assessed tax system. But do keep records in case ATO audits you
Hey @JollyConfused,
You’re very close, and it mainly comes down to making sure your records are strong and you’ve checked a couple of key details.
For the 2014 value, you can use the market value at the time you became an Australian resident, but it needs to be something you can support. An old real estate agent appraisal may help, but stronger evidence such as a retrospective valuation or comparable sales is usually more reliable.
You don’t need to send this with your tax return, but you do need to keep records.
You should also consider whether the main residence exemption applies. If the property was your home at some point, it may reduce the capital gain depending on your circumstances.
You don’t need to tell us when you transfer the sale proceeds to Australia. You only report the capital gain in your tax return, not the transfer itself.
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