Non-tax residents may not able to access the main residence CGT exemption, unless a specific life event such as death, a terminal medical condition or divorce occurs.
No. Residency status when selling home Full/partial main residence exemption still available?
1 Non-resident for more than six years (regardless if certain life events happened or not) • Possibly if home acquired on or before 9 May 2017
• No (if home acquired after 9 May 2017)
2 Non-resident for six years or less • No (if certain life events did not happen)
• Yes (if certain life events happened)
Example 1, for homes acquired on or before 9 May 2017, the availability of the main residence exemption would depend on when the non-resident individual sells their home:
• for homes sold on or before 30 June 2020 (ie the interim period), such non-resident sellers would still qualify for the main residence exemption, or
• for homes sold after 30 June 2020, such non-resident sellers would not qualify for the main residence exemption.
Example 2, for homes acquired after 9 May 2017, a non-resident seller cannot claim the main residence exemption when they sell the home.
As shown below, such a situation can have significant consequences for taxpayers who have used their home as a main residence for a significant amount of time but when they sell their home they are a non-resident. Here the taxpayer would not qualify for any (ie not even partial) main residence exemption.
Disclaimer: This is for general guidance on matters of interest only. The application and impact of laws can vary widely based on the specific facts involved. You should consult a professional adviser.