Tens of thousands of Australians living abroad were relieved when a A$581m government plan to overhaul capital gains tax for expats fell through. However, that victory might be short-lived as Treasurer Josh Frydenberg admits he will not give up.
Since 1985, Australians living abroad have been able to claim the CGT exemption on the family home. This exemption was available so long as the home was rented out for no more than six years at a time.
The Coalition Government's May 2017 budget announcement to deny the main residence exemption for Australians who sell their homes while living abroad.
This remains our government's policy"
Under the proposed law change, Australians would have been hit with capital gains tax if they sold it while resident overseas — regardless of whether the home was rented out or left vacant — and the tax bill would have dated back from the time the owner purchased their home, not the point at which they moved overseas.
Expats living abroad had criticised the changes for being retrospective and the Bill eventually lapsed in Parliament. But Treasurer Josh Frydenberg has said the Bill will be revisited.
"This remains our government's policy," he told ABC Australia.
Tax experts warn expatriate home owners seeking to avoid the tax could contrive circumstances by returning to Australia to oversee the sale of the property before return to their new domicile.
"This is an attack on principal residences. Just because we move overseas does not mean we are any less Australian. It is nuts," said Christopher Koren, a director of buyers' agent Morrell and Koren to Australian media outlet Financial Review.