CGT issues from OZ?
Question from Scott updated on 20th May 2013:
I own a rental property in Auckland and have recently moved to Sydney, I've heard that if I buy a property in Australia and live in it and sell my Auckland property that I might liable for capital gains tax on the Auckland property? If that is the case then is there anyway around it?
Our expert Mark Withers responded:
That's a good question. There are two aspects to it. Firstly the Australian tax residency soy yu need to contact an Australian accountant that understands rules for migrants to Australia. In particular, you need to ask them whether you qualify as a temporary migrants exemption there? If you don't qualify, when would you become an Australian tax resident? What does that mean in terms of capital gains tax on sale of an overseas rental. If you have an oustanding loan on your New Zealand rental, you should check with the Australian accountant whether you have other Australian tax liability if you have a foreign loan. Re New Zealand tax residency, have you contacted the Inland Revenue Department to ascertain that you have become a non New Zealand tax resident? You cannot "assume" you will become a non New Zealand tax resident just because you've moved overseas. Whether you qualify fas a non New Zealand resident or not, you still have to file a New Zealand tax return for the net rental profit/loss.
Mark Withers and his team at Withers Tsang & Co specialise in advising on property related transactions, valuation and restructure services and tax planning.