What foreign residents pay CGT on
Foreign residents are taxed only on taxable Australian property: real property in Australia (land, houses, apartments, leases of land), water entitlements, indirect interests of 10% or more in land-rich entities, mining rights, options or rights over taxable Australian property (such as off-the-plan contracts), and assets used in a business carried on through an Australian permanent establishment. When an individual stops being an Australian resident, CGT event I1 happens to their non-taxable-Australian assets such as shares, unless they choose to defer it (those assets are then treated as taxable Australian property until sold). Temporary residents aren’t subject to event I1.
The CGT discount
- Bought after 8 May 2012 and a foreign or temporary resident throughout: no discount.
- Resident for part of the period: discount apportioned to the resident days (the calculator does this with “Foreign resident for part of ownership”).
- Bought on or before 8 May 2012: the pro-rata method if you were an Australian resident at some time after 8 May 2012, or the market value method (based on the asset’s value at 8 May 2012) if you were a foreign or temporary resident on 8 May 2012. If both apply, you choose.
- A transitional 50% discount applies to foreign investors in specified Australian renewable energy assets for CGT events from 1 October 2026 to 30 June 2040.
Main residence exemption
Foreign residents at the time of the sale contract can’t claim the main residence exemption – including partial exemptions and the 6-year rule – unless they satisfy the life events test. Timing a sale while still an Australian resident can matter a great deal.
15% foreign resident capital gains withholding
For contracts entered into from 1 January 2025 the buyer must withhold 15% of the property’s market value (usually the sale price) and pay it to the ATO, regardless of the price. The amount is a credit against the seller’s final tax. Australian residents avoid it by providing a clearance certificate. Foreign residents can apply for a variation if the withholding would exceed their likely tax.
Foreign resident tax rates
No tax-free threshold and no Medicare levy: 30% up to $135,000, 37% to $190,000 and 45% above (2024–25 onwards). See rate tables.
The 2027 changes
Foreign and temporary residents are excluded from the new indexation regime, so existing rules continue. Under the enacted Act, if you were a foreign or temporary resident at any time during ownership after 8 May 2012, your asset isn’t split at 30 June 2027 (s112-155(1)(d)), and any foreign or temporary residency after 1 July 2027 rules out indexation (s114-25). Returning expats should get advice.
Frequently asked questions
Do non-residents pay capital gains tax in Australia?
Yes, on taxable Australian property – mainly Australian real property (including through interests in land-rich entities) and assets of an Australian business. Gains on most listed Australian shares held as portfolio investments are generally not taxable for foreign residents.
Do Australian expats get the CGT discount?
Not for periods of foreign residency after 8 May 2012. If you were a resident for part of the time, the discount is apportioned.
What is the foreign resident capital gains withholding rate?
15% of the property’s market value (usually the sale price) for contracts entered from 1 January 2025, with no minimum threshold for real property. Any seller who doesn’t give the buyer an ATO clearance certificate – including Australian residents – has 15% withheld.
References
Every figure on this page was checked against these primary sources on 16 October 2026.
General information only – not financial or tax advice. See our disclaimer. Spotted an error? Email [email protected].