The legislative amendments to remove the CGT main residence exemption for non-residents have become law.
The Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures) Bill 2019 has received assent as Act No 129 of 2019. The measure will deny the main residence exemption to non-residents except in certain circumstances, eg terminal illness, death or divorce, where they occur within six years of the individual becoming a non-resident. The amendments generally apply to CGT events occurring on or after 9 May 2017, although transitional rules are in place for dwellings sold on or before 30 June 2020.
Other amendments in the Bill are:
- from 9 May 2017, the principal asset test in the foreign resident CGT regime will apply on an associate inclusive basis, and
- additional capital gains discount of up to 10% for investments in affordable housing, for CGT events occurring on or after 1 January 2018.
The Bill also enables a reconciliation payment to be made by developers who sell dwellings to foreign persons under a near-new dwelling exemption certificate.
Source: CCH iknow
