Australians living overseas who are deemed foreign tax residents will have their capital gains tax exemption scrapped where they own Australian property that was formerly their principal place of residence, where that property is sold after 30 June 2020.

A typical example is where expats purchased a family home when they were Australian tax residents, lived in it and then moved permanently overseas. Whilst they have been living overseas, the Australian property has been rented.

If the property is sold before 30 June 2020, they will be able to claim a partial capital gains tax exemption for the time it was their principal place of residence in Australia. When the property is sold after 30 June 2020, as foreign tax residents, capital gains tax will be payable on 100% of the capital gain including the time the property was a principal place of residence.