The Federal Government has been warned that impending legislative changes will unreasonably and unfairly penalise Australians working overseas by revoking the capital gains tax (CGT) exemption on their family home.
Major accounting group, CPA Australia told the Senate Economics Legislation Committee that the unreasonable penalty is tied up in the Government’s legislation aimed at improving housing affordability – The Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measure (No.2) Bill 2018.
The CPA Australia submission said its members, particularly those living overseas, were very concerned that the legislation was seeking to retrospectively remove the main residence exemption (MRE) from CGT for non-residents from the time the property became the taxpayer’s main residence – instead of from the time they became a non-resident.
“It is unreasonable to effectively penalise Australians for departing Australia for work or personal reasons by revoking their right to a CGT exemption on their family home,” the submission said.
CPA Australia said the legislation had the effect of retrospectively changing the application of the MRE to as far back as 20 September, 1985, when the CT provision commenced.
“CPA Australia does not support the imposition of the proposed retrospective changes. The government has not put forward reasons as to why it is good public policy that the law be change retrospectively and to the detriment of taxpayers,” the submission said.
“It is draconian to change the tax treatment of the family home post the acquisition of that home – and for some citizens that are now non-residents, it may have been their family home for more than 30 years,” it said. “Further, it will be difficult for many to substantiate changes to the cost base of their home as they would not have maintained the necessary documentation due it not being necessary or required at the time.”
Add new comment