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How to avoid loss by paying VAT to these people

Source: xkb.com.au
[Economic News]     02 Jan 2020
Australian realestate owners living overseas will still be exempted from high CGTs until the end of June, according to the Australian Broadcasting Corporation.
How to avoid loss by paying VAT to these people

Australian realestate owners living overseas are still exempt from paying high CGTs for sales until the end of June.


Australian realestate owners living overseas will have to sell their homes before the end of June if they want to avoid paying high capital asset value-added tax, the Australian Broadcasting Corporation reported.

Aussies residing abroad had been able to apply for exemption from CGT from their family`s real estate for decades before, but in early December, federal government aimed to tweak the A $581 million plan for overseas residents`CGT arrangement, which passed the Senate. The bill largely eliminates the CGT exemption policy imposed on Australians since September 20,1985.

This means that thousands of people who sell their homes while they live overseas could face CGT. And the tax law will go back to the time when owners bought, not when they moved overseas. For those who bought homes in the late 1980s, it could mean a heavy tax.

But for overseas residents who already own realestate on May 9,2017, under the new law, if they sell realestate on or before June 30,2020, they can also apply for a major residence asset value-added tax exemption.

The reform plan, originally proposed in the federal budget for fiscal 2017-2018, has since been heavily criticized by the diaspora and its supporters, leading to federal government extending the proposed measures beyond the election.

In July, ABC News was told that when asked if it would continue, the proposed change "remains listed as our governance policy."

Mardi Heinrich, a partner at KPMG`s tax office, said the policy measure was "tortuous" through the procedure." People who are or will be overseas will be impacted by the sale of their main Australian home while living overseas. "

"Foreign citizens who buy a home in Australia while they work will also apply to the law when they return to their country to sell the real estate. He added:" In addition, Australians who live abroad and have their main residence abroad will be affected if they return to Australia for a temporary stay. "

KPMG`s senior tax adviser, Bob Deutsch, called it a "outrageous legification "..." No one knows how many people are likely to be affected by these harsh measures, but there will surely be thousands. "

However, federal government has made some changes to its initial proposal for 2017, offering exemptions to taxpayer based on certain "life events" such as terminal illness, death or divorce. But heinrich says this applies to those living abroad for six consecutive years or less than six years, and only for very limited unfortunate situations.

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