GRA Blogs

Articles by Matthew Gilligan

Matthew Gilligan

Australian Budget Hits Offshore Property Investors

The recent Australian Budget announcements include a significant rule change which will affect any New Zealanders whom hold property investments in Australia. Specifically, the 50% discount which was available when calculating capital gains tax on property that has been held for more than 12 months is removed.

By way of background, most readers will be aware of the fact that Australia has a capital gains tax regime. This applies to all property within Australia, whether or not the owner is resident there. Broadly speaking up until 8 May 2012 offshore investors were subject to the same rules in relation to capital gains tax as Australian resident investors. In particular, where an investor owned a property personally or via a Trust they could generally qualify for a 50% discount on the capital gains tax applicable to the sale of a property if it had been held for longer than 12 months.

From 7:30pm, 8 May 2012, the 50% discount is removed for offshore investors with application to capital gains accrued after this date. The result of this is that if you have a property you acquired prior to 8 May 2012 any gain that accrued up until that date still qualifies for the 50% discount, but gains from that date do not. At this stage we are not aware of how pre 8 May and post 8 May gains are going to be calculated, but presume it will be incumbent upon the investor to determine that. Accordingly, foreign investors will be incentivised to get optimistic valuations for properties placing a value on them at 8 May 2012. We will follow this aspect of the rules closely and report once more is known.

As always, if you have queries in relation to the above please contact us.

Matthew Gilligan
Matthew Gilligan
© Gilligan Rowe & Associates LP

Did you like this article? Subscribe to our newsletter to receive tips, updates and useful information to help you protect your assets and grow your net worth. We're expert accountants providing expert advice to clients in NZ and around the world.

Disclaimer: This article is intended to provide only a summary of the issues associated with the topics covered. It does not purport to be comprehensive nor to provide specific advice. No person should act in reliance on any statement contained within this article without first obtaining specific professional advice. If you require any further information or advice on any matter covered within this article, please contact the author.
Property School gave me the knowledge, resources and confidence to seriously start looking at buying my first property in the next few months. All of the speakers had a wealth of knowledge (I rate them at least 12/10) - I've learnt so much! - Nerys Whelan, April 2019
We can help
Here's how
Investing in residential property?

Put this at the top of your reading list.

If you're investing in residential property, seeking to maximise your ability to succeed and minimise risk, then this is a 'must read'.

Matthew Gilligan provides a fresh look at residential property investment from an experienced investor’s viewpoint. Written in easy to understand language and including many case studies, Matthew explains the ins and outs of successful property investment.

  • How to find the right property
  • How to negotiate successfully.
  • Renovation do's & don'ts.
  • Property management.
  • Case studies and examples.
  • and much, much more..