The Housing affordability bill has passed the House of Representatives without amendments on 28 November 2019.
The Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures) Bill 2019 contains amendments relating to the removal of the CGT main residence exemption for foreign residents and implements the measures announced in the 2017-18 budget housing affordability package to improve housing affordability.
Foreign residents will be denied access to the main residence capital gains tax (CGT) exemption from 7.30 pm Australian Eastern Standard Time on 9 May 2017 except in the case of certain life events that occur within six years of ceasing their Australian residency.
The amendments will allow foreign residents to continue to access the main residence exemption within six years of becoming a foreign resident if a CGT event occurs to their Australian property and during that period they or their spouse experience certain life events—the death, or divorce or terminal illness, or their child who is under 18 years old.
A transitional arrangement will apply for properties already held at that time, with the change taking effect for these properties from 1 July 2020. Foreign residents should consider how this arrangement will impact their foreign assignments and plan their tax affairs to avoid potential high CGT due on the sale of their main residence.