Australia’s new CGT rules: What expats and foreign investors need to know

Australia has introduced new Capital Gains Tax (CGT) requirements for foreign residents selling certain Australian assets, with further changes taking effect in July 2027.

If you have Australian property or investments, are planning a sale or are moving to or from Australia, it is worth understanding how the new rules could affect you before you act.

What changed for foreign residents on 1 October 2026?

Australia strengthened its foreign-resident CGT regime from 1 October 2026, broadening the definition of Australian real property and changing the principal asset test from a point-in-time assessment to one covering the 365 days before the CGT event.

The changes can affect foreign residents disposing of Australian real property, shares or other interests that may constitute an indirect Australian real property interest, including interests in trusts holding Australian property.

There are also reporting requirements for some large transactions. Where a foreign vendor makes a non-indirect Australian real property interest (non-IARPI) declaration for a disposal, including related transactions, of $50 million or more, the vendor may need to notify the ATO.

Where required, notification generally needs to be made at least 28 days before settlement. For shorter settlement periods, it must be made as soon as reasonably practicable and before settlement. The purchaser must also be notified in writing.

Foreign investors should not assume that selling shares or units rather than Australian property itself puts a transaction outside Australia’s CGT regime.

What changes from 1 July 2027?

Legislated changes following the 2026–27 Federal Budget will:

• Replace the 50% CGT discount for resident individuals, trusts and partnerships with cost-base indexation for affected gains accruing from 1 July 2027.
• Introduce a minimum 30% tax for individuals on certain net capital gains accruing from that date.
• Bring gains accruing from that date on certain pre-CGT assets into the CGT regime, subject to exemptions.

The transitional rules are also important for assets acquired before 1 July 2027, as the timing and valuation of existing investments could affect how the new rules apply.

For expats and internationally mobile individuals with substantial investment portfolios, reviewing existing assets before the changes take effect is advisable.

Why Australian tax residency matters

Your tax residency status can affect how Australia taxes your income, investments and capital gains.

This is particularly important if you are moving to or leaving Australia, hold assets overseas or have financial interests in more than one country.

Moving overseas does not automatically end your Australian tax residency. Equally, becoming an Australian resident can bring your overseas income and assets within the Australian tax system.

If you are planning a move, understanding your tax residency position early can help you assess the potential tax implications.

Read more: Australian tax residency: What expats need to know.

Moving to or leaving Australia? Review your assets first

Your Australian tax position can change significantly when you move to or leave the country, particularly if you hold investments or other assets overseas.

For new arrivals, overseas investments may fall within the Australian tax system once Australian tax residency begins. However, the treatment depends on individual circumstances, including whether you qualify as a temporary resident for Australian tax purposes.

For those leaving Australia, ceasing tax residency can trigger CGT consequences for certain assets.

Whether you are arriving or departing, it's worth reviewing the tax treatment of assets you own or plan to retain, including:

• Australian or overseas property
• Shares and investment funds
• Businesses and employee share schemes
• Offshore trusts
• Pensions and superannuation.

The timing of your move can be just as important as the timing of an asset sale. Reviewing your investments and other assets before relocating can help you identify potential tax implications in both countries.

If you are also considering transferring your foreign pension to Australia, it's worth looking at the tax implications separately.

How Sable International can help

Our cross-border tax specialists can help you:

• Establish your Australian tax residency
• Identify assets that may fall within the Australian CGT regime
• Assess how the 2026 and 2027 changes could affect you
• Work out which records or valuations you may need
• Coordinate your Australian position with UK or South African tax affairs

Our Australian cross-border tax advice can help you understand the wider implications while you still have choices about how and when to act.

Frequently asked questions

1. What changed for foreign residents on 1 October 2026?

The Australian real-property rules were broadened, and the principal asset test now considers the 365 days before a CGT event. Certain foreign vendors making non-IARPI declarations for transactions of $50 million or more also have ATO notification requirements.

2. What happens to the 50% CGT discount from 1 July 2027?

For affected gains, the 50% CGT discount for resident individuals, trusts and partnerships will be replaced by cost-base indexation for gains accruing from 1 July 2027.

They can. If you hold an asset before 1 July 2027 and sell it later, gains accruing before and after that date may receive different treatment.

4. Should I get a valuation or sell before 1 July 2027?

Not necessarily. Depending on the applicable transitional calculation, evidence of an asset’s market value immediately before 1 July 2027 may become relevant.

Start by making sure your acquisition, ownership and cost-base records are in order, then check which transitional rules apply before arranging a valuation or changing your plans.

Selling before 1 July 2027 is not automatically the better tax outcome.

5. Does moving overseas automatically end Australian tax residency?

No. Australian tax residency depends on your wider circumstances and is not determined by citizenship, visa status or time spent overseas alone.

Planning to sell, restructure or move after 1 July 2027? Understand how the CGT changes could affect your assets and what to consider before you act. Contact Sable International Tax Australia at [email protected] or +61 3 8651 4501.