The Government announced a number of changes yesterday as part of the release of the Federal Budget papers. Here’s how foreign investors will be affected.
A new Foreign Investors Tax Levy
A Foreign Investors Tax Levy of $5,000 per year will apply to foreign investors who do not occupy or lease their Australian properties for at least 6 months of the year.
Changes to the way Capital Gains Tax is applied
The Government will extend Australia’s foreign resident Capital Gains Tax (CGT). As part of this, foreign investors will no longer be exempt from access to the Capital Gains Tax (CGT) regime from 9 May 2017, however exceptions apply in some circumstances. In addition, the CGT withholding rate for foreign tax residents will increase from 10% to 12% and the CGT withholding threshold will be reduced from $2million to $750,000 from 1 July 2017.A Principal asset test will also apply to foreign tax residents with indirect interests in Australian real property, meaning they will also be liable for CGT.
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Migration Institute of Australia