The Libs Sneaking Property Tax

Discussion in 'Accounting & Tax' started by sash, 15th Feb, 2020.

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  1. essendonfan

    essendonfan Well-Known Member

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    I fit this description. US tax due, can start lodging early Jan - hand them all our paperwork second week of Jan, finally get it lodged July

    Horrid, I know of so many other people that have the same experiences
     
  2. FredBear

    FredBear Well-Known Member

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    So now I have this situation: came back to Australia two weeks ago, specifically to sell PPOR before the 30/6 deadline. Have been getting appraisals from agents, and about to choose which one. They all want to have the big public auction.
    Now comes the virus. Wife is still overseas, she is stuck there and I am stuck here.
    One agent informed that he will not have any on-site meetings. Another says don't list now.
    How can you sell a house with this going on?
    I know of other expats also stuck with this issue. Surely the government should look at moving the 30/6/2020 deadline?
     
  3. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    What tax advice did you seek prior to this rash decision ? Either a change of legal oowner to trigger a CGT event or recommence tax residency.

    The Commissioner has no powers to ignore tax law and the announcement was almost 2 years ago.

    Seek tax` advice on how to create a CGT event. Yes it may impact tax and also duty
     
    Last edited: 25th Mar, 2020
  4. FredBear

    FredBear Well-Known Member

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    I have not become a tax resident: non-residents have until 30/6/2020 (contract date) to sell their properties. That is clear in the legislation.

    Yes I did seek specialist tax advice, and it was expensive, on my position. I don't make rash decisions. I don't indulge in tax avoidance.

    However things have changed rapidly in the last couple of days. The last Qantas flights to UK/EU left today (QF1 from SYD via SIN to LHR and QF9 from PER to LHR). Other airlines have stopped flying or require a transit stop where you can't transit anymore or connect to where you need to go. This means I am stuck here, living in our PPOR. At some point I will be a tax resident due to the time I am here. Has there ever been a time when Australian citizens were banned from leaving the country?

    I'm not asking or expecting the commissioner to ignore tax law. I am asking for the law to be changed in view of the extraordinary circumstances, for example the deadline of 30/6/2020 to be moved to say 30/6/2021. Many other laws have been introduced or changed in the last couple of days. For example States have closed their borders, in direct contravention of section 92 of the Australian constitution. Restrictions on peaceful assembly, e.g. numbers at weddings and funerals have been introduced. This is a common law right dating back to the Magna Carta!

    Don't you think it would be reasonable, when a law that was finally passed only just before Christmas, giving non-residents until 30/6/2020 to sell tier properties, and now new laws have been introduced (no auctions, no open homes, restrictions on movement) that materially affect the ability to sell, that this law should be changed?
     
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  5. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    So left left it too late after extensive notice and expect Australian taxpayers facing a $166b tax deficit will accept a new law the extends this? Nup. Imagnie how the votes would fall if it was even attempted ? It wont.

    Its like crying into plastic wrap as there are no tissues. Nobody really will support this. Sorry this is blunt but likely honest.

    I remian firm in my view : Seek tax advice on how to create a CGT event. Yes it may impact tax and also duty. I know one tax adviser suggesting this could even be non-dutiable but as for non-residents not sure how. I could ask but it is a costly advice area. Im open to facilitate it but he charges like a wounded bull. Happy to assist but it wont be cheap. Personally I remain unconvinced but if you want to learn I would assist and give independent advice ( i worked for him and it may be legit he is smart but also a known tax scheme promoter and not a lawyer)
     
  6. FredBear

    FredBear Well-Known Member

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    I would have thought 4 months from landing in the country to deadline would have been plenty of time to arrange the sale. Do you realize around 2/3 of expats don't even know about this and are in for a very bad shock?

    To repeat, I did get and continue to get paid-for specialist tax advice. The CGT event needs to be before 30th June. The CGT event is the signing of the sales contract. There will be some CGT to pay due to rental period exceeding the 6 year rule. This has been calculated for the estimated sale price, including all the element costs. A plan to reduce the CGT via super contributions has been prepared. In short, all the homework has been done and documented. All that remains is the actual sale.

    Easy to say you should have moved earlier. If I would have said three weeks ago that Australia would have states closing their borders, Australian citizens banned from traveling abroad, open houses and auctions forbidden, you would have said I'm nuts. But here we are.
     
    Last edited: 25th Mar, 2020
  7. wylie

    wylie Moderator Staff Member

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    @FredBear what about listing with a price, now, and going ahead with what you've already planned?
     
  8. FredBear

    FredBear Well-Known Member

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    Thanks for the response - I've been speaking with agents today about that very strategy. One topic is that the standard 90 day exclusive agency agreement is no longer appropriate, so much changes in 90 hours at the moment locking into one agent and their way of working for 90 days is not suitable in the current climate.
     
  9. wylie

    wylie Moderator Staff Member

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    Change it to it 30 days?
     
  10. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    It may assist if you request the Commisioner to seek legislative change to address the situation of the inability to market a property for sale as proposed by legislation AND ask if the Commissioner would exercise discretion in such cases where a sale occurs after 30 June where it is available for sale but affected by the economic shutdown.

    I suspect the answer to the discretion is no but perhaps if the Commissioner was given legislative approval to make determinations for affected taxpayers it could be given consideration up the chain by Treasury and Govt.

    I would argue dont seek lobbyists to do this but it may assist if the ATO were bombarded by similiar requests. One fundamental flaw that underlines the policy intent and law is an assumption concerning a free property market to enable the deadline to occur.
     
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  11. FredBear

    FredBear Well-Known Member

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    Thanks for you response, Paul. In my opinion the free property market has essentially been closed down today.

    Today the Prime Minister announced:

    From tomorrow, all Australians are urged to only go out to shop “for what you need, food and essential supplies”, shop as infrequently as possible, to attend medical care, exercise and work or education if you were unable to work or learn remotely.

    Also:

    Only two people should now gather in public spaces and “other areas of gathering”


    From these two statements it looks impossible to have any kind of home inspection - even private appointments. Is housing an "essential supply" that people can go out to shop for? No browsing is allowed, so if you are looking for a 4 bed home, you should buy the first one you see? Can the agent take people though one by one, so that there are only 2 at any one time, for example firstly taking one spouse, then separately the other spouse?
     
  12. FredBear

    FredBear Well-Known Member

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    Is there any other legislation apart from this that has a 30th June 2020 deadline? It would make sense if all legislation that has this deadline would have the deadline moved.
     
  13. FredBear

    FredBear Well-Known Member

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    Thanks - Was thinking two weeks. If they do have a buyer on their database this should be enough time to close a deal. If no deal, then move on to the next agent.
     
  14. Simon Hampel

    Simon Hampel Founder Staff Member

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    I think you're reading too much into what was said today - read the transcript: Press Conference - Australian Parliament House, ACT | Prime Minister of Australia

    The 2 person limit specifically referred to gathering outdoors in public spaces - it does not preclude you (and your spouse) from inspecting a property by private appointment.

    The NSW Govt website has more information about public health orders that apply in this state: Public health orders | NSW Government - it's not as if you can't do anything at all. We're not in complete lockdown and if you need to find somewhere to live - you can do that.
     
  15. FredBear

    FredBear Well-Known Member

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  16. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Its been extended by a year once already and that date was after 14 months + of announcement. And would require Parliament to meet and pass the amendment as its already law. Albo would rip him to bits in the media if he gave that his focus. It could be announced by press release but if the truth be told its a very low priority on a parliamentary agenda and could be oposed by opposition etc and fail to be approved in the new world order of recovery. A biased and opinioned view by one group who fails the self interest test. Wrote to 7 in Parliament. Gonna take a load more than that to get up.

    MUST.... Not really. Would think jobs and the economy come way ahead. 800,000 freshly unemployed people would tear ScoMo a new one. And then another how many million with impacted incomes.

    If crown was open I would think their odds would be low.
     
  17. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    I do think there is some scope to address people who departed their AU home after assent was given, who also departed the country while the property was on-market and who were unable to sell prior to 30 June makes some sense however. A very limited concession. But it would need an end date on a sale maybe 1 year. How would that work ?