Client A bought a property in 2000 and lived in it until they moved to the US permanently in January 2013. From that point, they rented out their property until they sold it in 2017.
As a non-resident, Client A won't be able to get a clearance certificate from the ATO to avoid the 10% withholding tax when selling the property. This new rule applies to all non-resident property sellers.
However, there's good news regarding the calculation of Capital Gains Tax (CGT) on the sale. Client A can use the market value of the property on January 1, 2013 (when they started renting it out) as the cost base for CGT purposes, instead of the original purchase price. This means they'll pay CGT based on the property's value when it started generating rental income.
If you have any questions, feel free to contact Tax Ideas Accountants & Advisers. You can also book an appointment through our live calendar.