ATO Community

Re: Foreign Property Main Residence Exemption for New Migrants

Initiate

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Hi,

I have just got my PR visa granted and intending to land into Australia soon. I am planning to rent an apartment in Brisbane and intending to sell my house here in Malaysia in 6-12 months. This house has been my main residence for the past 10 years.

Am I eligible for the CGT main residence exemption if I become a tax resident of Australia?

Thanks.

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Taxicorn

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@Ravi1 

 

Yes, as long as you don't own any other property.

 

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Most helpful response

Taxicorn

Replies 3

@Ravi1 

 

Yes, as long as you don't own any other property.

 

Initiate

Replies 2

Thanks. 

I wonder if the fact that I was holding my Malaysian house (a foreign property) as a foreign resident for 10 years versus being a tax resident in Australia for the first time, will have an impact on my eligibility on main residence CGT exemption.

Will this be a concern? (besides not owning any property during my 1st year in Australia)

ATO Community Support

Replies 1

Hi @Ravi1,

 

From the time you land in Australia you are taken to have acquired the asset, this is also when you become a resident for tax purposes. Main resident exemption for foreign residents has changed and is no longer an option unless you meet the life events test, this is for properties held in Australia.

 

We will only be looking at the asset from the time you land in Australia, so it cannot be considered your main residence. If you are renting it out in Malaysia, any income you make will need to be included in your tax return. Even if it remains vacant, you will still need to declare a capital gain or loss. 

 

You can use 'market value', the amount it is valued at when you first arrive here. If you sell 6mnths later, depending if it increases/decreases or stays the same, will be the sale price less the market value. This will result in your capital gain/loss.

 

Links - 

Becoming an Australian resident for tax purposes. - Mentions you're taken to have acquired certain assets at the time you became a resident for their market value at that time. If you want this explained further you may contact our early engagement team. They can provide you with a broader explanation.

 

Working out your capital gain or loss.

 

Foreign resident and main resident exemption. This will not influence your situation as you are deemed to have acquired the asset when you first arrived here.

 

All the best and welcome to Australia.

Initiate

Replies 0

Wow, many thanks to Jodie2 and macfanboy for offering help Heart

All Aussies were amicable!

Looking forward to my settlement to this lovely country.