Selling home when you're not an Australian resident, what tax implications are you up for? Advice pls.

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Australian Taxation Office

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  retiredfeline on 17/01/2018 - 16:11

  +1

  Be aware that tax residency is different from physical residency. Was he ever a tax resident?

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  CyberMurning on 17/01/2018 - 16:16

  +5

  my advise will be for you to get proper legal advice

  • 

    djkelly69 on 17/01/2018 - 16:34

    +2

    Definitely this. I would be watching out in particular for Foreign Resident Capital Gains Withholding Tax (both from his perspective and yours as the potential purchaser).

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  Pumpkin_rrr on 17/01/2018 - 16:31

  +2

  First there was someone getting a $2k wedding gift. Now your Pop is gifting you a house! What's wrong with my relos?

  A lot of questions to be asked before one can answer this question..
  Is this Pop's PPOR or Rental Property? What is his "Tax" Resident status? Is this a gift to you at no cost whatsoever?
  What did yo mean by Pops "was" a Aus residence? Is he a PR now?
  Did he leave this house vacant or rent it out? How long ago?….

  My advice is to seek proper advice from a qualified Accountant.

  • 

    b00tyman on 17/01/2018 - 16:57

    Thanks Pumpkin :P

    he was working here in Aus so would have had tax history, then i think he chose not to continue his visa or Aus redidency
    And just to clarify, he is my father in law and we, me and misses have been living in his home ;)
    just tryna figure out the most cost effective way to do the name transfer…

    will be seeking proper legal advice but just seeing if anyone else had gone through this.

    thanks everyone.

    • 

      cakebaker on 17/01/2018 - 19:04

      "he was working here in Aus so would have had tax history"
      The issue is whether the ATO would consider him an "Australian resident for tax purposes" - which is a different question to whether he paid tax in Australia, what his immigration status was, or whether he was/is physically resident in Australia. There's a tool on the ATO website here that will give you a starting point: https://www.ato.gov.au/Individuals/International-tax-for-ind…
      But I agree with everyone else that this is worth getting proper advice on, as there seem to be multiple complicating factors.

    • 

      Pumpkin_rrr on 19/01/2018 - 09:02

      Would suggest to seek an Accountants advice.

      Only he can tell you whether the house is registered as PPOR or IP. Different tax implications.

      As for reapplying for PR, wonder how he can do it whilst many younger persons are finding it hard. Skilled or Business? A friend reinstated her PR but that was long time ago….

      • 

        Love a bargain on 19/01/2018 - 09:23

        Not an immigration agent myself but my understanding is that:

        • once you're a PR you never lose that status but if you're overseas, you can't re-enter the country as a PR without a valid PR visa

        • you can apply for that PR visa to be renewed (which are based on different requirement to a fresh PR application) however long it has been since your last visa expired (imagine someone who is a PR & hasn't left the country for 10 years, & therefore didn't need to have a valid PR visa)

        • however, if someone who has been away for a long time wishes to renew their PR visa, they need to be able to demonstrate why it should be renewed by justifying their time away, demonstrating their tie to Australia vs their tie to other countries, etc

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  CheapskateQueen on 17/01/2018 - 22:44

  There's a few questions… but yes first the question is

  Is he a tax resident? (Does he still live here? How long for? Has he permanently moved overseas? When did he leave?)

  • 

    b00tyman on 18/01/2018 - 11:49

    I believe hes no longer a tax resident and doesnt live here any longer.
    He has moved back to his country and probably happened about 10 yrs ago.
    Does that help?

    i was thinking the easiest way is for him to apply for Aus residency again and prove that this house was his place of residence, then do the transfer etc?
    Not sure what the approval process would entail to regain residency but would you think that would be the best way here?

    • 

      retiredfeline on 18/01/2018 - 12:31

      Getting residency doesn't necessarily get him tax residency. If his financial affairs remain mostly overseas, he will still be deemed a non resident for tax purposes. And remember even if he gets tax residency, he will be taxed by Australia for worldwide income, which may not be desirable.

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  Love a bargain on 18/01/2018 - 14:13

  When did he buy the property? It might have been pre-CGT (i.e. before 20 September 1985)

  Real property is a funny subject. Think there is an option to continue to hold the property as an Australian tax resident even when an Australian tax resident becomes a non-tax resident. Again any good tax accountant should be able to advise you on this (which should be a relatively common situation).

  With the proposed transfer to you/ your wife, I believe if ATO doesn't think it's transferred at the market price (which can often be the case with transfers between family members), it might request proof that it is (e.g. a valuation report) or deem that it is transferred at the market price (again, as assessed by a property valuer).