Is any property that is not your PPOR subject to CGT?

[jaypee06]

If I purchased a property overseas (and have never owned another property at any time, anywhere else in the world) and left it vacant until a few years later when I was able to establish it as my main residence by moving overseas and living there for a few years, would it still be subject to CGT when sold (assuming it was sold after I had returned to Australia and became a resident for tax purposes) as it wasn't my main residence prior to me being able to make it my PPOR?

Will intention at the time of purchasing the property affect this at all?

 

[Scott No Mates]

What does the tax law say for that country for absentee owners?

Is there a tax treaty between that country and Oz?

 

[Paul@PFI]

If I purchased a property overseas (and have never owned another property at any time, anywhere else in the world) and left it vacant until a few years later when I was able to establish it as my main residence by moving overseas and living there for a few years, would it still be subject to CGT when sold (assuming it was sold after I had returned to Australia and became a resident for tax purposes) as it wasn't my main residence prior to me being able to make it my PPOR?

Will intention at the time of purchasing the property affect this at all?

If you are a resident taxpayer you are liable for ALL worldwide income and profits on anything. Tax law doesnt care if you understand tax law.

You intent is irrelevant.

Personal tax advice is a must. Australian has entered into a tax information sharing agreement with 50+ other nations and its now an open book. Those other counties are seeking to tax your rent as so is Australia. The profit likely taxable here and maybe alse there too. Depends on many factors. Land in Italy, UK etc etc is all now liable to allegations of AVOIDANCE.

When you commence Aust residency special tax rules deal with that property. Dont rely on PPOR rules that work here to apply to foreign property but it may. Personal advice is a must.

 

[Terry_w]

You cannot claim absence from main residence provisions unless it is your main residence. a property cannot become your main residence until you live in it and establish it as the main residence. So that property would always be subject to CGT.

 

[Paul@PFI]

You cannot claim absence from main residence provisions unless it is your main residence. a property cannot become your main residence until you live in it and establish it as the main residence. So that property would always be subject to CGT.

You cannot claim absence from main residence provisions unless it WAS your main residence and that of your family too even if they don't own it. (I like to throw that one in for the ones with a spouse that also wants hers to be CGT free)

However once satisfied, a non-resident taxpayer who satisfies the MRE can still claim the MRE after they depart Australia in some instances. This avoids the loss of the 50% general CGT discount nicely.

I have questioned why the MRE isn't severed on departure from Australia and leave the issue of residency to another tax jurisdiction.