***UPDATE - This bill was re-introduced and passed through parliament with minor amendments. For more detail click here
The measure announced two budgets ago to remove the main residence exemption for non-residents has been stalled in parliament for some time. Now with no sitting days left before the election, the bill will lapse
This is great news for non-residents including Australians who have moved overseas for an extended period.
Under existing rules a foreign or temporary resident may be entitled to claim an exemption from capital gains tax when they sell a property that was their main residence even though they no longer live there. It was proposed as part of the 2018 budget that from 9/5/17, any new property purchases would not be eligible for the exemption when sold by a foreign or temporary resident. Existing property owners would no longer be able to claim the main residence exemption if they are a foreign or temporary resident from 30 June 2019.
As 30 June 2019 approached, foreign residents couldn't be sure if they needed to sell their old residence prior to that date to avoid a huge tax bill.
The government has been unable to get this controversial measure passed and has now apparently given up. This measure may still come back in the future but it would likely be in a slightly different form, with greater protections for ex-pats.