Richard and Dominique Barker, who live in Melbourne, say they are worried they’ll be caught up in the proposal. (Photo: Supplied)
01 June 2017
The Bill to implement part of the Budget measures (CGT) was introduced yesterday. The measures will only prevent foreign tax residents from claiming the CGT main residence exemption, and not temporary residents.
New Zealanders residing in Australia are generally not foreign residents, and therefore not captured by the proposed changes to CGT. Please seek financial advice to confirm your tax liability when selling property.
NZers in Australia lament capital gains proposal
Elizabeth Beattie – Radio NZ
Losing exemption to tax on capital gains is the latest move stripping New Zealanders in Australia of rights they used to have, some Kiwis across the ditch say.
Australia’s federal budget, released this month, included the removal of tax exemption for temporary residents and foreign buyers, in measures aimed at making houses more affordable.
For Richard and Dominique Barker, who live in Melbourne and own their own home, the potential changes are concerning.
“If we ever had to sell the house to go back to New Zealand, I feel like it would be quite unfair,” Mr Barker said.
“Over the last two or three years, it seems like the rights [we] had when [we] came here have been increasingly stripped away.”
While Mrs Barker was grateful for the opportunities life in Melbourne has afforded the couple, the uncertainty was difficult, she said.
“Until you know all of the facts … you don’t have full visibility into the situation. You can’t really make a complete decision,” she said.
“You just have to know that this is out there and try to stay woke.”
According to the Income Tax Assessment Act 1997 definition, a “temporary resident” would include the majority of New Zealanders living in Australia on a Special Category Visa (SCV).
This would also include anyone who has settled in Australia since 2001, anyone who was not in a long-term relationship with an Australian citizen and anyone who was not a permanent visa holder.
When approached for clarity, a Treasury spokesperson reiterated that foreign and temporary tax residents would be denied access to the main residence exemption.
“The government intends to publicly consult on the details of the measure, as part of the exposure draft legislation,” they said.
Homeowner Robin Turner, a Sydney-based New Zealander who has been living in Australia for 12 years, said she felt like she was in policy limbo.
Robin Turner, who lives in Sydney and has lived in Australia for 12 years, says New Zealanders are considered ‘temporary’ residents in some Australian laws and ‘permanent’ in others. (Photo: Supplied)
“Because we’re counted as temporary in some [legislation], and permanent in others, it’s very unclear,” Ms Turner said.
“People do need to be aware that it might be an issue. It would be good to have clarity around what is actually happening with that, and who will be impacted.”
Tim Gassin, chairman of the advocacy group Oz Kiwi, told Morning Report that New Zealanders would be caught up in the proposed changes.
“There’s been a grace period granted … but essentially, if you sell a house as a New Zealander, after that date you’re going to be slugged with this tax,” Dr Gassin said.
“That’s how it’s put in the budget papers, I don’t know if that’s what they intended.”
“What we’re not sure about is whether this is intentional, or whether it is simply an oversight, and if it’s an oversight whether the government will actually clarify that.”
Dr Gassin said many New Zealanders have been left contemplating the future.
“They are already starting to think, do I want to pack up my life and leave Australia?”
[Read the Radio NZ article].