Changes To Capital Gains Tax for Australian Expats Delayed to 2019
Changes To Capital Gains Tax for Australian Expats Delayed to 2019 – with the Senate sitting this week for their final time this year we are still no closer to finding out whether the controversial changes to Capital Gains Tax for Australian expats will be either scrapped or implemented, in either its current or a amended form.
To make matters worse the Federal government has scheduled just 10 sitting days before the expected federal election in May which provides an incredibly small window to Australian expats who would like to sell their Australian property before the expiry of the proposed transitional period on the 30th of June 2019.
According to Core Logic in the three months to October 2018 properties in Australia had a median time on market of 53 days, which is up from 42 days a year ago. With the pull back in the property market in full swing, and forecast to worsen, it is fair to say that this figure may rise.
If we assume that an Australian expat would have to list a property for 60 days before they go under contract then their property would have to be on the market by no later than the 1st of May 2019.
If there are hiccups in the sale process, like arranging finance and the building and pest inspection, then more than likely they will have to re-enter into a new contract with another purchaser.
With credit tightening by the big banks and mortgages becoming harder to obtain we see the risk of contracts falling over in the coming 12 months increasing. There is a risk that if they are unable to enter into a new contract before the 30th of June 2019 then they will be subject to the new legislation that is before the Senate.
After listening to feedback from Atlas Wealth Management, as well as domestic and international colleagues, in October Treasurer Josh Frydenberg said that the government will introduce targeted changes to the proposed legislation with a view to having the bill debated before the end of 2018.
Well here we are, another 2 months have past and Australian expats are none the wiser. The Federal government has failed Australian expats in two key areas:
- The proposed changes will have severe consequences for Australian citizens living overseas.
- On a daily basis Australian expats are trying to make financial decisions on “proposals and maybe’s” coming out of Canberra with no certainty. This uncertainty is causing a lot of financial stress to Australian expats as they don’t know if they need to act now by selling their property
Last week Shadow Treasurer Chris Bowen added to the chorus of opponents with a media release drawing attention to the difficulties that Australian expats are facing and we applaud him for going on record.
On a daily basis Atlas Wealth Management is speaking to Australian expats all over the world about their options and we struggle to provide them with a framework to work within due to Canberra’s lack of communication and uncertainty surrounding the legislation.
We would like to call upon Prime Minister Scott Morrison and Treasurer Josh Frydenberg to put this matter to bed and provide Australian expats with the certainty that they deserve.
We would also like to remind Mr Morrison and Mr Frydenberg that they’re not dealing with a large group very wealthy Australians that can afford to make up the cash shortfall should a large tax bill land at their doorstep but more so a demographic that is not too dissimilar to the Australian voting populace – they are every day working Australians.
The only difference between Australian expats and those Australian citizens living in Australia is the country that they are living in. They should not be penalised for making the choice to move overseas. The skills and experience that they obtain whilst working overseas are a great asset to our economy when they return to Australia.
Moving overseas but are unsure what the financial implications of a relocation maybe? Order your personalised Pre Departure Review.