Tax Resident

Q&A Tax

Question :

Mr. C is a NZ citizen and entered Australia on a special category Visa Subclass 444.

He stayed in Australia for a number of years and acquired Australian real property as his primary residence.

He has now returned to NZ with no plans to return to Australia. This residence has been retained and is now
rented on the open market.

Will an Australian tax return be required or is there an exemption to allow this to be taxable in NZ? The
rental property is the only Australian income earned.

 

Answer :

He would generally need to lodge an Australian tax return and show the rental income and deductions.
Even if he was a temporary resident while living in Australia and even if they have become a non-resident
they would still be exposed to Australian tax on:

Rental income derived from a property located in Australia; and Capital gains made from the disposal of a
property located in Australia, subject to the application of the main residence exemption etc.

The DTA with NZ still gives Australia to right to tax income and gains generated from real property
located in Australia. Refer to Articles 6 and 13.

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