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Re: Capital gains tax - overseas property - new migrant

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ZAK
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Hi All

 

I have a question on my overseas property which I bought it in 2008 when I was not resident of Australia. I got the grant letter for my PR in Nov 2008 and was required to make an initial entry to validate the visa and become resident so I made an initial entry in Apr 2009 but left after few days as I was unable to secure a job. I was living in that property all the time and moved out and rented it in Oct 2009 when I was still overseas. I finally moved to Australia in July 2010 permanently.

 

Now I am planning to sell the property and was wondering which date shall I consider for valuation of CGT.

 

Appreciate any assistance.

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ATO Certified

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Hi @ZAK,

 

Welcome to our Community!

 

Generally speaking, when you become an Australian resident (other than a temporary resident), you're taken to have acquired certain assets at the time you became a resident for their market value at that time. If you became a resident, the general cost base rules apply to any capital gains tax assets that are taxable Australian property.

 

Your main residence is generally exempt from CGT. You can find out what makes a dwelling your main resident here. If you move from one residence to another and the new property becomes your main residence, you may then be subject to CGT if you've rent out your old property and then sell it. Generally, CGT would be calculated from the date you started renting the property until the date you sole it or enter into a contact of sale. However, there may be further factors to consider based on your situation. As we can provide general information her on our Community, if you'd like to receive a more tailored response you can contact our Early engagement team by submitting a request form or requesting a callback and someone will contact you to discuss your circumstances further.

 

Thanks. 

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Best answer

ATO Certified

Community Support

Replies 2

Hi @ZAK,

 

Welcome to our Community!

 

Generally speaking, when you become an Australian resident (other than a temporary resident), you're taken to have acquired certain assets at the time you became a resident for their market value at that time. If you became a resident, the general cost base rules apply to any capital gains tax assets that are taxable Australian property.

 

Your main residence is generally exempt from CGT. You can find out what makes a dwelling your main resident here. If you move from one residence to another and the new property becomes your main residence, you may then be subject to CGT if you've rent out your old property and then sell it. Generally, CGT would be calculated from the date you started renting the property until the date you sole it or enter into a contact of sale. However, there may be further factors to consider based on your situation. As we can provide general information her on our Community, if you'd like to receive a more tailored response you can contact our Early engagement team by submitting a request form or requesting a callback and someone will contact you to discuss your circumstances further.

 

Thanks. 

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Newbie

Replies 1

That's a very useful reply, Thanks. I wonder what about new migrants who didn't get valuation at the time of moving and there is no such concept of back-dated valuation like we have here in Australia. How could someone prove that what was the market value of the property at the time they moved so when they sell the property, they only have to pay CGT on the profit on house value increase since the move to Australia and date of sale instead of the value increased since property purchase and date of sale.

 

Look forward to hearing from you

Community Support

Replies 0

Hi @kiwi_sam,

 

Thanks for getting in touch!

 

In this situation it's recommended to obtain as much information as possible regarding the purchase and sale of the property and contact our Early engagement team where they can contact you via phone or email to discuss the situation and explain how they think the tax laws might apply. It's a free service, and the team aims to get back to you within 3 business days.

 

Thanks, JodieH

 

 

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