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Unclear residency status lands investors in hot water

ATO

The Tax Office is reminding those investing in Australian property markets about strict certification requirements. 

Investors in Australia who are not Australian residents for tax purposes may need approval before they are allowed to invest in Australian markets. 

This could include applying for an exemption certificate, which would allow them to make offers on multiple properties, but only proceed with purchasing one. 

The purpose of this certificate is to allow a buyer to search for property without applying for approval each time they make a bid. 

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Temporary residents can also use the exemption certificate to purchase: 

- an established dwelling to live in
- a new dwelling
- a single block of vacant land for development

The ATO also reminds Australian residents that they are taxed on their worldwide income, including foreign income from capital gains on overseas assets. 

“You must declare income from all sources in your Australian tax return. If you have paid tax on any of this income in another country, you can claim a foreign income tax offset in Australia,” the ATO said. 

Important reminder

As an Australian resident, if you have already paid tax on your income in the country you earned it, you could be eligible for the foreign income tax offset credit. 

You need to have all the appropriate records to pay for this. 

However, the offset amount you are entitled to will not always be the same amount of the tax paid overseas. 

Unclear residency status lands investors in hot water
ATO
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