Updated 2 August 2026
Australian property stays in the CGT net when you leave the country, and the rules get harsher rather than easier. Foreign residents generally lose the main residence exemption, lose discount for their non-resident days, and face 15 per cent withholding on sale. Dated valuations are what limit the damage.
At a glance
Foreign residents are taxed in Australia on taxable Australian property, which includes direct interests in Australian real property. Leaving the country does not take a house or an investment unit out of the CGT net, and it does not trigger a deemed disposal of it either. The property simply keeps accruing a gain that will be taxed here when you sell.
A capital gains tax valuation is needed in the same circumstances as for a resident owner. The rules are covered in detail in expat and foreign resident CGT. What changes on departure is the concessions. The exemptions and discounts that made the numbers tolerable for a resident owner narrow or disappear, and the difference between selling as a resident and selling as a foreign resident is frequently very large.
Where you are a foreign resident for tax purposes at the time of the CGT event, the main residence exemption is generally denied for events after 30 June 2020. The test looks at your residency status when the CGT event happens, not at how long the property was genuinely your home.
The consequence is stark. A house you lived in for fifteen years, which would have been entirely exempt had you sold before leaving, can become fully taxable from its original cost base if you sell while non-resident. There is no partial relief for the years you lived in it.
Penalty risk
Timing the contract, not the settlementThe CGT event for a sale is generally the date of the contract, not settlement. Residency status on that date is what matters. Owners who plan to return to Australian tax residency, or who are leaving shortly, should take advice before signing rather than afterwards, because the difference can be the entire gain.
A limited exception preserves the exemption where you were a foreign resident for a continuous period of six years or less and a specified life event occurred during that period. The recognised events are narrow: a terminal medical condition affecting you, your spouse or your child under 18; the death of your spouse or your child under 18; or a CGT event arising from the breakdown of your marriage or relationship.
The exception is tested against the facts, so it is not a general hardship provision. Where it applies, the ordinary main residence rules are worked out as they would have been, which is where the six-year absence rule and a dated valuation come back into play. See the six-year rule.
The 50 per cent CGT discount stopped accruing for foreign and temporary residents from 8 May 2012. For an asset acquired before that date and held through periods of both residency and non-residency, the discount is apportioned, and the calculation can use the asset's market value at 8 May 2012 to work out the share that still qualifies.
That makes 8 May 2012 a real, dated valuation requirement for long-held property owned by anyone who has spent time as a foreign resident. It is a retrospective date now well over a decade old, so the evidence base needs assembling carefully. See retrospective valuations.
Expats who return and sell after 1 July 2027 meet the capital gains tax changes on the post-reset slice of the gain. Our CGT calculator shows how that slice is worked out.
Fix the values that decide your position before you sell. Independent reports for departure dates, 8 May 2012, and any other date required. Residential $297, commercial $595, AUD inc. GST, delivered in 24 to 48 hours.
Start your orderAsk about your datesFrom 1 January 2025 the foreign resident capital gains withholding rate is 15 per cent and the previous $750,000 price threshold has been removed, so it applies to the value of all property sales. Clearance certificates are now required from all sellers, including Australian residents, or the purchaser must withhold and remit to the ATO.
The withholding is not the tax. It is a payment on account, credited against the eventual assessment, but it is deducted at settlement whether or not there is a gain. Sellers who do not obtain a clearance certificate in time can lose 15 per cent of the sale price to the ATO until the return is lodged and the position resolved. The certificates take time, so they belong at the start of a sale process rather than at the end. Our guide to how foreign resident capital gains withholding works at settlement covers the clearance certificate and the variation in detail.
Not every expat needs all five. Almost every long-term expat with Australian property needs at least two, and both are usually in the past by the time anyone raises them.
The Treasury Laws Amendment (Tax Reform No. 1) Act 2026, enacted 26 June 2026, replaces the 50 per cent CGT discount with cost base indexation and a 30 per cent minimum tax from 1 July 2027 for individuals, trusts and partnerships. Affected assets are treated as disposed of and reacquired at market value on that date.
For expats, the interaction with the existing foreign-resident discount rules adds complexity rather than removing it, and the detailed mechanics are still being worked through. What is already clear is that a defensible 1 July 2027 value is as relevant to a non-resident owner of Australian property as it is to a resident one. See the 1 July 2027 valuation page.
| Report | Fee (AUD inc. GST) | Turnaround |
|---|---|---|
| Residential, current or any past date | $297 | 24 to 48 hours |
| Commercial, current or any past date | $595 | 24 to 48 hours |
Reports are prepared as desktop valuations, so being overseas makes no difference to the process or the timeframe. They can be addressed and billed to you or your Australian accountant.
Yes. Australian real property is taxable Australian property, so it remains within the CGT net regardless of where the owner lives. Foreign residents also lose access to concessions that residents keep, which usually makes the assessable gain larger rather than smaller.
Generally no. The exemption is denied where you are a foreign resident at the time of the CGT event, for events after 30 June 2020. A narrow exception applies where you were a foreign resident for six years or less and a specified life event occurred, such as terminal illness, a death in the immediate family, or a relationship breakdown.
From 1 January 2025 it is 15 per cent of the property's value, with no price threshold, withheld by the purchaser at settlement unless the seller provides a clearance certificate. It applies to all sellers, including residents, and it is a payment on account credited against the eventual assessment rather than a final tax.
That depends on the numbers and your plans, and it is advice for your accountant rather than your valuer. What is clear is that residency status at the contract date can decide whether the main residence exemption applies at all, so the decision should be made with a valuation and tax advice in hand rather than after signing.
