Atlas Wealth Management

1,888 supporters

Atlas Wealth Management is the leading provider of Australian expat tax financial advice. With clients in over 30 countries we are the leading provider of Australian expat financial planning, tax and wealth management services to Australian expats.

Started 1 petition

Petitioning Josh Frydenberg

Extend The Main Residence Exemption Transition Period For Australian Citizens Overseas

The Australian Federal Government proposed in the 2017 Federal Budget to remove the ability for Australian citizens living overseas access to the Main Residence Exemption (MRE). The second iteration of the proposal received Royal Assent on the 12th of December 2019 which only provided Australian citizens with just over 6 months to sell their properties under the transition period. With the implementation of Stage 2 Restrictions by the Federal Government, a ban on real estate auctions and open house inspections has made it almost impossible for an Australian citizen to sell their property within the required time frame. Other obstacles Australian expats are experiencing with selling within the required time frame include: The announcement of a moratorium on rental evictions in Australia for 6 months Travel bans and border closures resulting in the inability of the expat to return to Australia to prepare their property for sale. Quarantine requirements of 14-days for all Australian citizens returning to Australia negating their ability to meet with real estate agents and prepare their property for the sale process. Tenants testing positive for the corona virus (Covid-19) creating uncertainty with respect to being able to gain access to the property and show the property to agents and potential buyers. We are calling on the Australian Federal Government and Josh Frydenberg to announce a 12 month extension to the transition period so that Australian citizens can fully avail themselves of the flexibility and time frame offered as prescribed in the legislation. The Assistant Treasurer Michael Sukkar says: "A very reasonable grandfathering arrangement was put in place for foreign tax residents, and by June 30, 2020 they will have had over 37 months to dispose of their property and still been able to access the exemption". A bill is not law until it has received Royal Assent and there should be no expectation by the Federal Government that Australian citizens living overseas should have acted on a proposed bill until it received Royal Assent. Many bills proposed by the Federal Government do not proceed and Australians should not be expected to act on proposals: Since the last election 16 bills have not been passed and are not proceeding (https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_not_passed_current_Parliament If we take that out to all parliaments, 1,645 bills have not been passed and are not proceeding (https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_not_passed_all_Parliaments The Australian government has a perception that all Australian citizens living overseas are highly paid executives when in fact the majority are Australians earning modest salaries who have moved overseas to further their careers and experience the world. These people include teachers, nurses and those working in the hospitality sector. An incredibly large amount of Australian citizens living overseas are still unaware of these changes and should they sell their former principal place of residence after the 1st of July 2020 whilst living overseas they will be required to pay Capital Gains Tax (CGT) at the non-resident marginal tax rate (which starts at 32.5%) on the first dollar all the way back to the day that they first purchased the property, not when they moved overseas. We call on Josh Frydenberg and the Federal government to announce a 12 month extension to the transition period and allow Australian citizens to be able to adjust their financial affairs in a timely and orderly manner. About the Main Residence Exemption The Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 2) Bill 2018 was first read in parliament on the 8th of February 2018 and thanks to extensive lobbying by ourselves (Atlas Wealth Management) and industry colleagues the bill stalled in the senate and it lapsed on the 1st of July 2019. A new iteration of the bill emerged on the 23rd of October 2019 and received Royal Assent on the 12th of December 2019. As an example under the new rules an Australian could have lived in a property in Australia for 20 years and should they move overseas and sell that property, even in the first year or two of being away, they will be required to pay CGT for that whole period, not just for the time that they have been away. The change does not respect that Australian citizens tax status as a tax resident of Australia for the period of 20 years and completely ignores their entitlement to the Main Residence Exemption.  This new legislation is retrospective despite the governments insistence that it is not.

Atlas Wealth Management
1,888 supporters