ato logo

Your residency status and CGT

Your tax residency may be different to your residency for other purposes.

Last updated 29 June 2023

Know your tax residency status

There are 3 categories of tax residency:

  • Australian resident
  • foreign resident
  • temporary resident.

It is important to check your tax residency status because we do not use the same rules as the Department of Home Affairs.

For example, you:

  • can be an Australian resident for tax purposes without being an Australian citizen or permanent resident
  • may have a visa to enter Australia but are not an Australian resident for tax purposes.

How your residency affects CGT

Foreign and temporary residents are subject to CGT only on taxable Australian property, such as real estate in Australia and assets used to carry on a business in Australia.

The 50% CGT discount is generally not available to foreign and temporary residents for assets acquired after 8 May 2012.

Foreign residents are not entitled to the main residence exemption, unless they satisfy the requirements of the life events test.

If you become an Australian resident, or stop being one, the assets on which you pay CGT in Australia will change.

Assets you acquired before CGT started on 20 September 1985 are not subject to CGT.

For Norfolk Island residents:

  • assets you acquired on Norfolk Island before 24 October 2015 are exempt from CGT
  • all other assets are subject to the normal CGT rules.

Selling Australian real estate

If you are a foreign resident selling Australian real estate worth more than $750,000, the buyer of your property must withhold 12.5% of the purchase price and send it to us.

This is called foreign resident capital gains withholding. You can claim it back when you lodge your Australian tax return.