Expat Family Home Tax Free Status Last Chance

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Date:  28 June 2018
Author:  Steve Douglas
Source
Category:  Newsletter June 2018

Family Home

Austcham Hong Kong has been terrific in assisting our cause to stop the removal of the Principal Residence Exemption on the family home when sold while the owners are living abroad.

We have pushed hard and they recently managed to get a meeting with Treasurer Scott Morrison in Canberra, largely thanks to Minister Kelly O’Dwyer who has been sympathetic to our efforts.

In the meeting, they were told there is a reluctance to change path, despite us bringing to their attention the potential negative impact on the expat community and any Australian choosing to live abroad for some period in the future.

The Treasurer seems to think that these changes may help with housing affordability, and that is his motivation.  Sadly that is unlikely as a higher tax would create a greater reluctance to sell and further stagnate supply during periods of strong demand, actually adding to price pressure rather than relaxing it. 

Add to this the potential additional cost on any one forced to sell due to detrimental factors such as death, divorce or financial hardship, and this proposed change becomes very damaging.

The fact is that the current laws are fair and reasonable and provide appropriate revenue potential to the Government as well as sufficient encouragement for owners to rotate their property from time to time.

Given that expats and foreign owners already pay a higher tax than their in Australia counterparts due to the removal of the 50% discount on Capital Gains for sales after May 2012, there is little wonder why we question the merit of the proposed changes.

The Legislation is currently sitting in the Senate waiting to be passed, so unless we can press the Treasurer further to change his mind, it is an inevitability.

Click here to read my email to the Treasurer asking for him to reconsider the passing of this legislation.

Here is what you can do.  Click here to send an email to the treasurer and insert the below text

Dear Treasurer,

We support SMATS Group & Austcham Hong Kong’s efforts to stop the passage of legislation removing the Principal Residence Exemption from Australians selling their family home while living abroad.

We do not believe it will help housing affordability as there would be an unwillingness to sell properties due to an unfair higher tax cost.

Further, this change would only hurt the unfortunate forced to sell their former family home due to times of distress like death, divorce or financial hardship.

Please reconsider your stance on this given the current law adequately deals with this and foreign owners already pay significantly more tax than Australian residents through the removal of the 50% CGT discount.

In the interests of fairness and sensibility we hope you can see fit to stop this proposed change from coming into effect.

Every email will count, so please take the time to send yours as soon as possible and we just might be able to stop this at the midnight hour.

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