Petition Against Removal Of Principal Residence Exemption For Overseas Expatriates

Closed: Tuesday 31 December 2019

In the May 2017 Budget Australian Treasurer Scott Morrison announced measures to remove the Principal Residence for foreign investors.

The draft legislation was released on 21st July 2017 and the final legislation presented to Parliament on the 8th February 2018 and was referred to the Senate Standing Committees on Economics for review.  In their report of 23rd March 2018, they ignored various logical arguments presented, including SMATS's, and have left the draft legislation unchanged.  The Senate is yet to pass the final legislation, but both Liberal & Labor have committed to allow it through which will likely occur when Parliament resumes in May.

Time is running out, so we need to push the media and politicians to recognise the importance of expatriates and consider adopting our request to exempt Australian Citizens and Permanent Resident Visa Holders from the changes.

Click here to view and download our Media Release and post this on your Social Media using the #australiansarenotforeigners.

UPDATE March 2019

It has been a very confusing time for Australian Expats since the announcement in the May 2017 Federal Budget that the Government intended to remove the historical Capital Gains Tax Free status of the former Principal Residence if the property was sold while living overseas.

Since that time we have made many submissions and representations personally as well as having been working closely with Austcham Hong Kong who have been terrific in getting face to face time with relevant Ministers and opposition Shadow Ministers.

This resulted in the Government pulling the Legislation from the Senate floor before a vote was called which was a massive step in the right direction.

Recently, we have seen public acknowledgements from both Liberal & Labour that the proposed legislation is unlikely to proceed.

That aside, we have not seen formal recognition of this fact and there remains much fear and speculation in the expatriate community.

As such, we hope this update and the attached information sheet will help you understand the current position.  Note, the only people potentially affected are those who lived in their home prior to relocation overseas and may sell that property while still living abroad.  In regard to general investment properties, there are no changes occurring.

Click here to read the full information sheet on the proposed changes. 

We are hopeful of a formal announcement soon, and likely in the 2nd April 2019 Budget papers, so ensure you sign our petition to keep updated of any further developments.

UPDATE October 2018

The strong push by Austcham Hong Kong and SMATS has paid great dividends with the withdrawl of the legislation from the Senate floor before any vote to review and reconsider.  Although this isn't a full withdrawl  (at least not yet) it is a massive achievement.

The Austcham Hong Kong team led by Jacinta Reddan were instrumental in this through persisitence in getting in front of Ministers, Senators and Shadow Ministers.  SMATS was proud to support their efforts through technical information and sponsorship of the travel costs.

UPDATE July 2018

I had an early birthday present when I found out the Scott Morrison was coming to Perth for a presentation and I happened to be in town.  Went along and managed to personally hand deliver my letter to him and have an extended chat about this issue.  He was respectful and confirmed they were looking at changes to protect against some unforeseen situations like death or divorce.

UPDATE June 2018

The Legislation is still waiting a final vote through the Senate.  Austcham Hong Kong managed to get an audience with the Treasurer, Scott Morrison, in Canberra thanks largely to the support of Minister Kelly O'Dwyer.

The Treasurer was reluctant to change things albeit he was sympathetic to some of the issues raised.  He feels the change supports the Governments push to make housing more affordable, however we strongly believe this will have a negative impact on housing prices as offshore owners will be more reluctant to sell their property, thus reducing supply and adding upward pressure to prices.

Click here to read our email to the Treasurer pleading our case and showing him the logic that counters his argument.

This is our last chance to stop the passage of the Legislation.  You can help us by email the Treasurer yourself.

Click here to read our recent article on what you can do and how to email Treasurer Scott Morrison.

In the proposed legislation,  the changes went much further than expected by proposing to remove any entitlement to the usual tax free capital gains status on a principal residence for any prior period living in Australia if the property is sold at the time when you are living overseas.

The proposed legislation is a great deviation of the intentions announced in the 2017 Budget Overview which stated "Strengthening the capital gains tax rules so that foreign investors pay their fair share of capital gains tax."

It goes much further and is anything but fair to any Australian that has chosen to spend a few years working outside Australia, as they will be aggressively removed from their currently legally entitled residence exemption, purely on the fact that you are overseas at the time of sale.

As an example, had you lived in a property in Australia as your residence for 20 years, then move overseas and sell the property after 1 year abroad, then the full capital gains would be subject to Capital Gains Tax where under current rules it would be a tax free entitlement. 

This hardly seems fair!

The current legislation adequately ensures that an appropriate level of Capital Gains Tax is due and payable when the property is an investment so there is no need for any change in legislation if one wanted to maintain fairness.

We need your help to send a clear message that this simply isn't appropriate or fair!  Join our petition now and pass the link on to your friends and family.

There is more at stake than just an increase in tax.  Remember anyone living abroad is already carrying a greater tax burden due to the removal of the previous 50% capital gains tax free concession which occurred in May 2012.

This is sending a statement that the Government is willing to look at taxing your private residence, today's proposal is for expatriates but tomorrow's could be for all Australians.

SMATS Group has been taking up this fight and lodged a submission to Treasury in August 2017,been lobbying relevant Ministers and Members of Parliament and doing all we can to make some noise, but alone we cant seem to get the message through.  Click here to read our Treasury Submission.

We also made a submission to the Senate Committee in March 2018.  Click here to read our Senate Committee Submission.

The time to make a stand is now and we need, and appreciate, your support.

Your undertaking in our petition:

We hope that our participation in this petition demonstrates to the Australian Government the important value we place on the role of Australian Expatriates in:

• Supporting the Australian property market;
• Improving the supply of housing for Australia's growing population;
• Creating and maintaining valuable employment and economic activity in the Property & Construction industries; and
• Promoting Australia on the international stage in business and commerce through the advancement of our individuals in the global corporate world.

We feel it only fair that Australian Expatriates are not adversely disadvantaged for living overseas and should maintain their rightful entitlement to any Capital Gains Tax Concession relating to periods of ownership of a property that has been used as their principal residence and family home.

We further submit that:

• The current legislation is more than adequate in this regard and there is no need to make any changes in this regard;
• It should be noted that as expatriates we are currently paying more than our fair share of Capital Gains Tax as we are no longer entitled to the 50% Capital Gains Tax concession for any period of overseas residency, so we are already dramatically disadvantaged to Australian residents;
• Just because we have taken the opportunity to expand our skills and careers through a period of overseas employment, should not mean that we lose any rights as Citizens or Permanent Residents in regard to the tax status of our family home; and
• Being an expatriate has significant economic benefit to Australia through trade opportunities, global reputation, enhanced skills that will return to Australia eventually and significant ongoing investment as the vast majority of expatriates continue to acquire property and investment assets in Australia and repatriate significant financial resources, adding great value to the Australian economy and national wealth.

I consent for my name to be displayed on a list of support, but my contact information and personal survey responses will remain private and confidential and not be disclosed to any party.

Petition Entry

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